17c Formula: How Diminished Value Is Calculated

Key takeaways

The 17c formula caps diminished value at 10% of the car’s value, then cuts it with a damage modifier and a mileage modifier.
A Georgia court approved it for State Farm’s Georgia first-party claims after the Mabry case. It is not a statute, and you do not have to accept it.
On the standard mileage scales, cars at 100,000 miles or more get $0, and so does damage with no structural involvement.
Claim with market evidence instead: an appraisal, dealer offers, comparable listings and the repair invoice.

When you claim diminished value, many adjusters, especially in Georgia, start from this short formula. This guide shows every multiplier, works through examples, explains where the formula came from and why it usually lands far below what the market says a repaired car lost. The formula is not a statute or a regulation, and it does not bind other insurers or other states. Nothing requires you to accept it.

How the formula works

Start with the car's retail value just before the accident. State Farm uses the NADA guide, now branded J.D. Power.
Multiply by 10%. This is the "base loss" and the most the formula can ever produce.
Multiply by a damage modifier between 0 and 1.
Multiply by a mileage modifier between 0 and 1.

In one line: diminished value = pre-accident value × 0.10 × damage modifier × mileage modifier. Every step can only lower the number, so the result is never more than 10% of the car's value.

Damage modifiers

Published worksheets give five anchor values. State Farm letters also show values in between, such as 0.10 and 0.30, so treat the scale as continuous. The last column is the most the formula can pay at each level, before the mileage cut.

Damage	Modifier	Most it can pay
Severe damage to the structure of the vehicle	1.00	10% of value
Major damage to structure and panels	0.75	7.5% of value
Moderate damage to structure and panels	0.50	5% of value
Minor damage to structure and panels	0.25	2.5% of value
No structural damage and replaced panels	0.00	0% of value

Read the labels closely. The scale is about structure. A car with replaced panels and no structural damage gets a modifier of 0.00, so the formula pays nothing however large the repair bill was.

Mileage modifiers

State Farm's documented method is a straight line: (100,000 minus the miles) divided by 100,000, and never below zero. For some vehicles it uses 150,000 instead; the criteria are not public. Published 17c worksheets use 20,000-mile bands instead:

Mileage	Modifier
0–19,999	1.00
20,000–39,999	0.80
40,000–59,999	0.60
60,000–79,999	0.40
80,000–99,999	0.20
100,000+	0.00

The two methods give different modifiers for the same car. The bands drop in steps; the straight line falls a little with every mile:

Odometer	Worksheet bands	Straight line
15,000	1.00	0.85
25,000	0.80	0.75
39,999	0.80	0.60
40,000	0.60	0.60
55,000	0.60	0.45
75,000	0.40	0.25
95,000	0.20	0.05
100,000	0.00	0.00

Look at the band edge. One more mile, from 39,999 to 40,000, moves the worksheet modifier from 0.80 to 0.60 and cuts the result by 25%. If your odometer sits just past an edge, check which method the adjuster used.

What 17c pays on a $30,000 car

This table runs the formula with the worksheet bands for a car worth $30,000 before the accident. Cosmetic damage is left out because it always gives $0.

Damage	10,000 mi	30,000 mi	50,000 mi	70,000 mi	90,000 mi	100,000+ mi
Severe	$3,000	$2,400	$1,800	$1,200	$600	$0
Major	$2,250	$1,800	$1,350	$900	$450	$0
Moderate	$1,500	$1,200	$900	$600	$300	$0
Minor	$750	$600	$450	$300	$150	$0

The ceiling is $3,000: severe structural damage on a car with almost no miles. Everything else is a fraction of that. For a different value, scale the row: a car worth twice as much gets twice the figure.

A worked example, step by step

A $30,000 SUV with 45,000 miles has moderate damage to structure and panels, fully repaired.

Base loss: $30,000 × 10% = $3,000.
Damage: moderate damage to structure and panels is 0.50, so $3,000 × 0.50 = $1,500.
Mileage with the worksheet bands: 45,000 miles is 0.60, which gives $900.
Mileage with the straight line: (100,000 − 45,000) ÷ 100,000 = 0.55, which gives $825.

If State Farm used the 150,000-mile scale for this vehicle, the modifier would be 0.70 and the result $1,050. Had the car reached 100,000 miles, both standard methods would give $0, however serious the damage. The Matthiesen, Wickert & Lehrer 50-state survey works the same arithmetic on a $16,000 car with moderate damage and 50,000 miles and gets $480.

Real letters look like this. A 2020 State Farm letter on a $19,925 car used a damage modifier of 0.10 and a mileage modifier of 0.21 and offered $41.84. In a 2013 federal case, State Farm's 17c figure on about $6,000 of repairs was $48.76, and a co-plaintiff with over 100,000 miles got $0.

17c next to market evidence

Our guide to filing a claim uses the same $30,000 SUV. In that made-up example, two dealers put in writing that they would pay about $22,500 for it with the accident on its history and about $25,500 with a clean one. The market evidence puts the loss at $3,000. The formula puts it at $825 to $900, about 28% to 30% of that. The numbers are illustrations, but the pattern is the point: the formula only applies its own multipliers, while dealer offers and an appraisal measure what buyers pay.

How to check an insurer's 17c figure

If an adjuster sends a number that looks like 17c, take it apart:

Ask in writing for the retail value used, its source, the damage modifier, the mileage modifier and the mileage method (bands, or the straight line at 100,000 or 150,000).
Check the value against the guide value for your exact trim, options and mileage at the date of loss.
Compare the damage modifier with the repair invoice. Structural operations such as measuring, frame pulls or sectioning should not sit at the bottom of the scale.
Recompute it. If the arithmetic does not match, say so with your numbers.
Then make the larger point: even a correct 17c figure measures the formula, not your car's loss in market value.

Where the formula came from

The documented history starts with Georgia litigation against State Farm. In State Farm Mut. Auto. Ins. Co. v. Mabry (2001), the Supreme Court of Georgia held that State Farm's physical-damage coverage includes diminished value and that State Farm must assess it. The trial court later approved the 17c formula as an acceptable method for State Farm's Georgia first-party claims, in Section 10 of a March 6, 2002 settlement order. The sources we found do not explain the name.

What came before is unclear. One law-firm survey says 17c grew out of an earlier regulation from the Georgia Insurance Commissioner's office and was used by several insurers. In 2008 the Commissioner said his office had never issued a regulation requiring a specific formula. Either way, no statute or regulation makes 17c the measure of diminished value today. If your claim is in Georgia, the Georgia diminished value page has the state's rules and deadline.

17c outside Georgia

Outside the Georgia State Farm settlement, 17c is a method some insurers use, not a legal standard. Where a state allows a claim against the at-fault driver, its courts measure the loss under their own rules, usually the difference in market value before and after the accident, or the repair cost plus any value the car still lost. The Texas Department of Insurance has said a liability insurer "may be obligated to pay a third party claimant for any loss of market value" (Bulletin B-0027-00). North Carolina requires liability policies to provide an appraisal procedure for diminished value disputes (G.S. 20-279.21(d1)). Your state's rule is on the diminished value laws by state page.

Why the number is usually low

The 10% cap is arbitrary. On a $30,000 car, 17c can never pay more than $3,000. In the Baker class action, the plaintiffs' expert testified that diminished value can reach 25% of the pre-loss value.
Mileage counts twice. The guide value already reflects the mileage, and the mileage modifier cuts the result again.
High-mileage cars get zero. At 100,000 miles (or 150,000 for some vehicles) the formula assumes the accident costs nothing.
Only structure counts. Airbag deployment, extensive refinishing and the size of the repair bill do not move the damage modifier unless the structure was involved.
The bands have cliffs. One mile across a band edge cuts the figure by 20% to 100%, with no real change in the car.
No inspection, no local market. It uses a national guide value, with no look at the car and no local comparable sales.
It falls far below appraisals. According to the plaintiffs' filing in Baker, appraisals by experts State Farm hired averaged $3,237 across 517 claims, while State Farm's average payment was $190. That is an advocacy filing, not a court finding.

For comparison, our own screening model, which we rate low confidence, puts moderate damage at 6% to 13% of the pre-accident value and severe damage at 15% to 27%, before adjustments such as age, mileage and vehicle type. 17c tops out at 10% for any damage. Our ranges are estimates for screening, not appraisals; the methodology page explains them.

What courts have and have not said

The 2002 settlement order says State Farm cannot be found in bad faith merely for applying 17c. Class members can still dispute the amount on their own claims.
In 2008, Georgia's Insurance Commissioner told auto insurers to stop implying that the Department endorses any particular formula, and said each claim should be evaluated on its own merits.
In 2021 a federal court denied class certification in a challenge to 17c (Baker v. State Farm; affirmed in 2022). The ruling turned on proving harm car by car, not on approving the formula. The court also found the plaintiffs' sample unrepresentative and said that, at most, 17c misprices late-model, low-mileage cars with high repair costs. Expect insurers to cite this, and answer with evidence about your own car.

What to do instead

Base your claim on evidence of what the market pays: an independent appraisal for larger claims, written trade-in offers from dealers who know about the accident, comparable listings, and the repair invoice that shows how serious the work was. Put the number and the evidence in a written demand; the diminished value demand letter template shows each paragraph. If the adjuster answers with the formula, ask in writing how the figure reflects your car's actual loss in market value.

To see both numbers for your own car, use the free diminished value calculator. It runs 17c with the bands and the straight line and shows a market-based range next to it. The full process, from evidence to small claims court, is in the guide to filing a diminished value claim.

Diminished value rules in your state

Whether you can claim, against whom and for how long depends on your state. The diminished value laws by state page compares all of them. The ten most populous states:

Questions

What is the 17c formula?

A shortcut some insurers use to put a number on diminished value: pre-accident retail value × 10% × a damage modifier × a mileage modifier. It was approved for State Farm’s Georgia first-party claims after State Farm v. Mabry (Ga. 2001). For a $30,000 car with moderate damage and 45,000 miles it gives $825 to $900, depending on the mileage method.

Do all insurers use 17c?

No. It is common in Georgia, often as a first offer, and some insurers use relabeled versions. Others use different methods. Ask the adjuster in writing how they calculated their figure.

Is 17c the law?

No. A Georgia trial court approved it for State Farm’s Georgia first-party claims under the Mabry settlement. It is not a statute or regulation, and in 2008 Georgia’s Insurance Commissioner said each claim should be evaluated on its own merits.

Why is it called 17c?

The sources we found do not explain the name, so we do not guess. What they do show is that the Georgia trial court approved the formula in Section 10 of its March 6, 2002 settlement order in the State Farm litigation that followed Mabry.

How do I calculate 17c for my car?

Multiply the pre-accident retail value by 0.10, then by the damage modifier (1.00 for severe structural damage down to 0.00 for no structural damage), then by the mileage modifier (worksheet bands, or (100,000 − miles) ÷ 100,000). The free calculator does this both ways and shows a market-based estimate beside it.

What if my car has more than 100,000 miles?

On the standard scales the formula gives zero (State Farm uses 150,000 miles for some vehicles). The market may still pay less for your car after the accident, so you can still claim the loss you can document, although older cars usually lose less.

Sources

General information, not legal advice. Rules differ by state and change over time. How we research and check our numbers is on the methodology page.