The 17c formula puts a dollar amount on diminished value. Diminished value is the resale value your car loses after a crash shows up on its record. This loss happens even if the car is repaired well. A multiplier is a number between 0 and 1 that you multiply by. The 17c formula has its roots in a case the Supreme Court of Georgia decided in 2001, State Farm v. Mabry. The tables are from J.D. Power, a company that researches cars. The worked example is from Kelley Blue Book, a guide to used-car prices.
The 17c Formula in Three Steps
Every 17c diminished value calculator, ours included, requires three inputs: what the car was worth before the accident, how severe the damage was, and the car's mileage.
- Find the base loss. Check a price guide like Kelley Blue Book or NADA (another used-car price guide) to see what the car was worth right before the crash. Take 10% of that value. This base loss is the most 17c will ever pay out.
- Apply the damage multiplier. Pick the row in the damage table that matches your car. The scale starts at 1.00 for severe damage to the frame, which is the car's main metal structure, and drops to 0.00 when the frame was not harmed. Multiply the base loss by that number.
- Apply the mileage multiplier. Pick the row that matches the miles on the car on the day of the crash. The scale starts at 1.00 for under 20,000 miles and drops to 0.00 at 100,000 miles or more. Multiply your step 2 result by that number. What remains is the 17c figure.
Table of Damage Multipliers
| Damage level in the 17c table | Multiplier |
|---|---|
| Severe structural damage | 1.00 |
| Major damage to structure and panels | 0.75 |
| Moderate damage to structure and panels | 0.50 |
| Minor damage to structure and panels | 0.25 |
| No structural damage or replaced panels | 0.00 |
Check the last row. If the crash did not reach the frame, the 17c result is $0, no matter how big the repair bill is. That $0 is just the number the 17c formula gives you. It does not mean your car held its value. Repairs to outer body parts like doors, fenders and bumpers can still cut what buyers will pay. For that kind of damage, our market range is 2% to 5% of the car's value. Our guide on how to calculate diminished value shows how that range works.
Table of Mileage Multipliers
| Miles at the time of the crash | Multiplier |
|---|---|
| 0 to 19,999 | 1.00 |
| 20,000 to 39,999 | 0.80 |
| 40,000 to 59,999 | 0.60 |
| 60,000 to 79,999 | 0.40 |
| 80,000 to 99,999 | 0.20 |
| 100,000 or more | 0.00 |
Not every insurer goes by these same mileage rows. One article in a law school journal describes a different scale that was used in a single lawsuit. That scale uses 0.9 at 10,000 miles.
Diminished Value Formula 17c: A Worked Example
Kelley Blue Book gives this example. The car was worth $25,000 before the crash, and it had 30,000 miles on it. Imagine the accident left moderate damage to the frame and the outer body.
- Base loss: start with $25,000 and take 10%, which comes to $2,500.
- Damage: multiply $2,500 by 0.50 to get $1,250.
- Miles: multiply $1,250 by 0.80 to get $1,000.
The adjuster, the person at the insurance company who handles the claim, would probably start with that $1,000. One answer can change it a lot. Say the same car has 100,000 miles. Its mileage multiplier then becomes 0.00. The 17c result is $0.
Now consider the market side, meaning what buyers really pay. For moderate damage, our calculator estimates 5% to 12% of what the car is worth. That range comes from Property Damage Pros, a Utah law firm that has certified appraisers on staff. On the same $25,000 car, that equals $1,250 to $3,000. Use our diminished value calculator to see your 17c figure next to your market range.
Why the 17c Formula Tends to Lowball
The formula brings the number down in three ways.
- The 10% cap. Even heavy damage on a nearly new car can never go above 10% of its value. Property Damage Pros estimates frame damage at 15% to 30% of a car's value.
- The mileage cut. After 100,000 miles, the figure falls to zero. In the Tiller case, State Farm used a 0% mileage multiplier for one driver because of that. It paid that driver nothing for the lost value.
- The damage cut. If the frame was not hit, the damage multiplier is 0.00. Yet Carfax says the average drop in a used car's retail price after damage is about $500.
One Driver's 17c Offer: $48.76
Real offers from insurers show how this works. In Tiller v. State Farm, a case before a federal appeals court, the driver's car had $6,000 in damage. State Farm's letter explained its 17c offer this way:
- Value: the car's value before the crash, taken from the NADA price guide, then reduced by 90%, which leaves a 10% base loss.
- Damage cut: another 30% taken off.
- Mileage cut: another 11% taken off.
- Offer: a check for $48.76. The driver thought it was too low and never cashed it.
Drivers said 17c was designed to produce low figures. The appeals court did not rule on that. It decided the case for other reasons and said it would not give an opinion on whether the formula is fair.
Experts do not like it either. A note in the Boston University Law Review, a law school journal, says the figures were picked without a good reason. The NAIC Journal of Insurance Regulation, put out by the national group of state insurance regulators, published a 2023 article that found the Georgia formula flawed. Insurers can also offer less than 17c. A Kelley Blue Book editor calculated $650 to $715 for her own vehicle, and the offer from Liberty Mutual was $400.
Negotiating a Low 17c Offer
Think of the 17c number as the insurer's first offer, not the final answer. It is the most familiar diminished value formula, but other methods exist for measuring the loss. A 17c formula calculator only reflects the insurer's point of view.
- Get a market appraisal. An appraiser is a trained expert who figures out what cars are worth. If your claim is a big one, Kelley Blue Book recommends a certified appraiser, a car appraiser with a formal credential. The report sets the value of your repaired car using real sales, not a price table. Our appraisal guide goes over the cost.
- Compare it with the repair bill. According to the NAIC paper, the loss often lands close to 10% to 20% of the repair cost. When your 17c figure is far below that range, point it out in writing.
- Put your demand in writing. A demand letter is a short note that asks the insurance company to pay a set amount. Send one with your figure, the appraisal and the repair papers. Our demand letter template fills itself in from your answers.
- Check your state's rule. Your state decides if you can make the claim and how much time you have. Look at the state rules table. If the insurance company will not raise its offer, talk to a lawyer.
Is the 17c Formula Georgia Law?
No. It started with a case in Georgia, but the state never turned it into a rule. In an official notice dated December 1, 2008, the Georgia insurance commissioner stated that the department has never set any formula for this kind of loss. The notice also says that counting only on one formula may not be the right approach.
Even so, the formula caught on. According to Carfax, a lot of insurance companies rely on it. The drivers in the federal case had been hit by people whose insurance came from State Farm. For at least two of those claims, State Farm based the payout on 17c.
The Origin of the 17c Formula: State Farm v. Mabry
The formula comes from a Georgia court case, State Farm v. Mabry, filed by State Farm's own Georgia customers. On November 28, 2001, the Supreme Court of Georgia decided that a crash can reduce a car's value even once it is fixed. State Farm had to figure out that loss in addition to paying for the repairs. The court kept in place an order from the lower court to review these claims using "an appropriate methodology and procedure."
State Farm then came up with its own method. The lower court in Georgia approved it in an order dated March 6, 2002, a federal appeals court explains. The formula was written in paragraph 17, section C. That is where the name 17c comes from.
Why use a formula? The case involved thousands of State Farm customers. Checking each car on its own would have taken too long and cost too much. So the settlement, the deal that ended the case, relied on a formula instead, according to the same law school journal.