Diminished Value Demand Letter Template (Free)

Key takeaways

Send the demand after repairs are complete, by certified mail with a return receipt, and keep a log of every letter and call.
Ask for one specific amount tied to your evidence, give a reply date (30 days is common, 60 under a Georgia § 33-4-7 demand) and ask for the method behind any reduction.
Answer the 17c formula before the adjuster raises it, and cite only your own state’s rules.
Do not sign a general release of all property damage claims. Limit any release to the diminished value paid.

This is the letter our Diminished Value Claim Kit produces for a claim against the other driver's insurer, with your details as [placeholders] and a note on each paragraph. Copy it, fill in the brackets and delete what does not apply. It is general information, not legal advice. For the whole process, see the guide to filing a diminished value claim.

Before you write

Wait for the repair and the final invoice.
Check your state. Our data shows a claim against the at-fault driver's insurer as allowed in 31 of the 51 jurisdictions we track. The diminished value laws by state page has each rule.
Set your number first, from an appraisal, dealer offers or comparable listings.
Note the deadline. Deadlines to sue for property damage run from 2 years to 10 (Rhode Island, a figure we have not checked against the statute text) in the 51 jurisdictions we track, and 3 years is the most common.

The template, paragraph by paragraph

1. Your details, the date and how you sent it

[Your full name] [Street address] [City, State ZIP] [Phone] · [Email] [Date] Via certified mail, return receipt requested [and by email]

Certified mail with a return receipt proves when the insurer got the letter, and your deadline counts from that day. Email the adjuster a copy too.

2. The adjuster and the claim

[Adjuster name] [Insurance company] [Claims office address] RE: Third-Party Diminished Value Demand - Claim No. [Claim number] Your insured: [At-fault driver name] Date of loss: [Date of loss] Vehicle: [Year, make and model], VIN [VIN] Odometer at the time of loss: [Mileage] miles Dear [Adjuster name]:

The claim number and the insured driver's name let the adjuster match the letter to the file. Use the odometer reading from the day of the accident.

3. Liability and the finished repair

On [Date of loss], your insured caused a collision that damaged my vehicle. Your company accepted liability on [date of liability acceptance]. [If liability has not been accepted, replace the previous sentence with: The police report, number (report number), is enclosed.] The repairs were completed on [repair completion date] by [repair shop name]. I am now claiming the diminished value of my vehicle: the loss in market value that remains after proper repair because the vehicle now has an accident history.

The loss is measured on the repaired car, so send the letter once repairs are finished.

4. The damage

The final repair invoice, enclosed with its supplements, totals $[repair total] and includes [the structural work, airbag replacement and replaced panels on the invoice]. [Add the body, frame and refinish labor hours from the invoice, and whether the parts were original-equipment (OEM) or aftermarket.] Photos of the damage before and after the repair are enclosed.

The invoice shows how serious the damage was: structural work (measuring, frame pulls, sectioning), airbag parts, labor hours, and original or aftermarket parts.

5. Your state’s rule

[State] allows the owner of a vehicle damaged by another driver to recover its diminished value: the loss in market value that remains after proper repair. [Add your state’s rule and its citation, if it has one.]

Cite only what your state recognizes. Where our research found a rule, the kit adds it: the Texas Department of Insurance's Bulletin B-0027-00, La. R.S. 9:2800.17 in Louisiana, 806 KAR 12:095 in Kentucky. Where the rule is unclear, drop the first sentence and just say you claim the loss in market value that remains after proper repair. Our data shows the claim as limited in Massachusetts, Michigan, Nebraska, New York, Tennessee and West Virginia, and not allowed in North Dakota; check before you send it there.

6. Your number and how you set it

Before the accident, the vehicle's retail value was about $[pre-accident value] [say how you got it, for example a J.D. Power (NADA) or KBB guide value for its trim, options and mileage, or the median of three or more comparable listings, enclosed]. Based on the severity of the repair relative to that value, and on the vehicle's age, mileage, type and history, I estimate its diminished value at $[low estimate] to $[high estimate], which puts its market value after repair at about $[value after repair]. This estimate is not a capped formula. [If you have an independent appraisal, add: The enclosed appraisal by (appraiser name) measures the diminished value at $(appraised amount) using comparable vehicles with and without an accident history. Otherwise delete this note.]

Say how you set the pre-accident value and attach the proof. An independent appraisal is the strongest evidence. Defects the shop left behind go on a separate line, with the cost to fix them.

7. An answer to the 17c formula

If your evaluation uses the "17c" formula, please do not rely on it. A Georgia trial court approved it only for State Farm's Georgia first-party claims after the Mabry case; it is not a statute or regulation. It caps diminished value at 10% of the vehicle's value, applies a mileage reduction even though the value already reflects the mileage, and gives zero at 100,000 miles (150,000 for some vehicles). For my vehicle it would give about $[17c figure], which does not measure what buyers pay for a car with this accident history.

Many adjusters start from the 17c formula, so answer it before they cite it. The free diminished value calculator gives your car's 17c figure. 17c reaches zero at 100,000 miles on the standard scales, but State Farm uses 150,000 for some vehicles, so check the worksheet before you send that line.

8. Other items (optional)

[Optional, and negotiable: loss of use not already paid, $(amount) for (number) days; the appraisal fee, $(amount). Delete this paragraph if it does not apply.]

These extras are negotiable. Whether an appraisal fee can be recovered varies by state and is unclear.

9. The demand and the deadline

I demand $[amount] for the diminished value of my vehicle. Please pay or respond in writing within 30 days of receiving this letter.

Ask for one specific number and give a date. Thirty days is common. In Georgia, a demand under O.C.G.A. § 33-4-7 must state a specific amount and go by certified mail or statutory overnight delivery, and the insurer has 60 days to respond; the kit uses that wording for Georgia diminished value claims.

10. A request for their method

If you reduce or deny this claim, please explain in writing how you reached your figure, including the method, the values you used and any formula modifiers.

This puts the insurer's method on the record. If it used 17c, you will see the multipliers.

11. The release

Please do not send me a general release of all property damage claims. Any release should be limited to the diminished value you pay.

A general release can end every property damage claim, this one included. North Carolina protects a diminished value claim after a repair release (11 NCAC 04 .0421(b)(5)); other states may not.

12. Your rights and next steps

I reserve all of my rights. If we cannot agree, I may file a claim against your insured in [State] small claims court within the [number]-year limitation period for property damage; file a complaint with the [Department of Insurance] about the handling of this claim.

Keep it factual: no bad-faith accusations without facts, and name only steps you would take. Small claims cases are brought against the at-fault driver, not the insurer. North Carolina law adds an appraisal process (G.S. 20-279.21(d1)). It reportedly applies when liability is not disputed and the two figures differ by more than the lesser of $2,000 or 25% of the pre-accident fair market retail value. That detail comes from an unofficial copy of the statute, so check the official text.

13. Enclosures

Enclosures: 1. Final repair invoice and supplements 2. Photos before and after the repair 3. [Independent appraisal, or comparable listings worksheet] 4. Vehicle history report showing the accident 5. [Written dealer trade-in or purchase offers] 6. Police report [and your liability acceptance letter] 7. [Your company's diminished value offer or 17c worksheet, if received]

Number every enclosure so the adjuster can find it, and keep a full copy.

14. Signature

Sincerely, [Signature] [Your full name]

Sign it as the owner. If the car is leased, the leasing company may need to take part.

If you are claiming on your own policy

Put "First-Party" and your policy number in the RE block, and say the car was damaged in a covered loss. Replace the state rule with a request to assess diminished value under your policy, after checking it for a "diminished value" or "decreased value" exclusion. Replace small claims with the policy's own deadline to sue, which can be as short as one year. Our data shows first-party claims as recoverable only in Georgia, Oregon and Washington; Vermont requires insurers to review these claims unless the policy says otherwise.

What evidence to attach

The final repair invoice with every supplement, and photos before and after the repair.
An independent appraisal, or written dealer offers and comparable listings with and without accident history.
Proof of the pre-accident value: a guide value for your trim, options and mileage, and three or more similar listings.
A vehicle history report showing the accident, the police report and the liability acceptance letter.

How to send it and follow up

Send it by certified mail with a return receipt, email a copy, and keep a log of every letter and call.

If 30 days pass from delivery without an answer, send a short follow-up that refers to your demand by date and asks for payment or a written explanation of the method within 10 business days. Reply in writing with your evidence, and do not accept a counter-offer on the phone. Do not let the deadline to sue get close while you negotiate.

Let the kit fill it in

Start with the free diminished value calculator for the 17c figure, a market-based range and your state's rule. The Diminished Value Claim Kit ($49, one time) fills this letter in from your numbers and state, and adds a follow-up letter, an evidence checklist, a negotiation script, a small-claims guide and your dates. You edit and send it yourself; we never contact the insurer.

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

When should I send a diminished value demand letter?

Once the repairs are complete, because the loss is measured on the repaired car, and well before the deadline to sue. Deadlines to sue for property damage run from 2 years to 10 (Rhode Island, a figure we have not checked against the statute text) in the 51 jurisdictions we track, and 3 years is the most common.

How long should I give the insurer to respond?

Thirty days from delivery is common. A Georgia demand under O.C.G.A. § 33-4-7 gives the insurer 60 days. If the date passes, send a follow-up asking for a written answer within 10 business days.

Can I send this letter to my own insurer?

Only with changes, and usually only where the policy and state allow it. Our data shows first-party diminished value as recoverable in Georgia, Oregon and Washington, depending on the policy wording. Check your policy for a diminished value exclusion first.

What if the insurer answers with a 17c figure?

Ask in writing for the method, the value used and the multipliers. Then answer with your evidence: the appraisal, the dealer offers and the invoice. The formula was approved only for State Farm’s Georgia first-party claims, and it is not a statute.

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.