Diminished value claim on a commercial van: what insurers offer after a crash and how to prove more

A van that has been crashed and repaired sells for less than the same van with a clean history. That gap is diminished value, and when someone else caused the crash, it belongs in your claim against their insurer next to the repair bill and the loss of use while the van sat in the shop. For the scene, the broker reports, and opening the claims, start with the vehicle accident guide. This page covers the value the van lost.

Who pays diminished value on a commercial van?

The at-fault driver’s liability insurer pays it, as part of what its driver owes you for damaging your property. Your own policy almost never does.

The third party claim rests on ordinary tort damages. Section 928 of the first Restatement of Torts, quoted by the Texas Supreme Court in J&D Towing v. American Alternative Insurance (2016), lets the owner of a damaged vehicle recover the reasonable cost of repair “with due allowance for any difference between the original value and the value after repairs.” California’s civil jury instructions say the same thing in plain terms. Under CACI 3903J (2026 edition), when a vehicle can be repaired but is worth less afterward, the damages are the drop in value after repairs plus the reasonable repair cost, capped at the vehicle’s value before the harm.

Texas’s insurance regulator agrees. The Texas Department of Insurance’s bulletin B-0027-00 says an insurer may owe a third party claimant for lost market value regardless of how complete the repair was. A 2023 article in the NAIC’s Journal of Insurance Regulation lists Arizona, Colorado, Florida, Georgia, Illinois, Indiana, Iowa, Louisiana, Maryland, New Mexico, New York, Oregon, South Carolina, and Virginia among the states that allow third party diminished value claims.

Your own business auto policy is a different contract. The standard form, CA 00 01, excludes loss to a covered auto “due to diminution in value.” Its definitions section explains the term as a drop in market or resale value, real or only perceived, that results from a direct and accidental loss. The same Texas bulletin says that under the standard Texas personal auto policy, an insurer owes its own policyholder nothing for diminished value once the vehicle is fully repaired. Georgia is the main exception. The Georgia Supreme Court’s 2001 Mabry decision held that a policy promising to pay for the policyholder’s loss covers lost value as well, and a federal court applying Georgia law in 2017 described policies as covering it absent an appropriate exclusion. The NAIC article calls Georgia the only state with clear legal direction that first party claimants can recover it. What your own coverage pays after a crash is in the physical damage insurance guide.

How insurers calculate it: the 17c formula

The first offer may come from a formula rather than an inspection of your van. The best known is Georgia’s 17c formula, taken from a 2002 order in the Mabry class action against State Farm in the Superior Court of Muscogee County.

The NAIC article writes it this way:

Diminished value = 0.1 × NADA retail value × damage modifier × mileage modifier

Both modifiers run from zero to one, and moderate damage carries a damage modifier of 0.5. So the formula caps any loss at 10 percent of book value before it starts cutting.

A federal court order from 2013, Tiller v. State Farm, shows what that produces. One claimant’s car had $6,000 of crash damage and a NADA value of $14,755. The insurer’s letter took 10 percent of the value, applied a damage modifier of 30 percent and a mileage modifier of 11 percent, and sent a check for $48.76. Another claimant’s car had $3,500 of repairs and more than 100,000 miles. According to the complaint, the insurer applied a mileage modifier of zero and told him his car had lost no value.

That second result matters for a NEMT fleet. As an example, a van driven 200 miles a day, 250 days a year, adds 50,000 miles a year and passes 100,000 by the end of its second year. If the adjuster’s version of the formula treats high mileage the way the Tiller complaint describes, the offer on that van is zero, however serious the repair.

The NAIC article records two criticisms worth repeating to an adjuster. The book value already accounts for mileage, so the mileage modifier counts it a second time. And the formula never inspects the repaired vehicle, so the quality of the repair never enters the number.

Why a converted van breaks the book value

The formula starts from a book value, and book values do not price a wheelchair conversion. BraunAbility says plainly that there is no mobility equipment version of Kelley Blue Book or Edmunds for estimating trade-in value. A mobility dealer looks at the van’s age and mileage, then at wear on the conversion, the maintenance history, and the warranty left, and sets a price from those.

The conversion makes up much of the price. BraunAbility’s own pricing example puts a 2026 Chrysler Pacifica Select Safety at $47,935 and its Power XT conversion at $40,750, for $88,685 in total. An adjuster who starts from the base vehicle’s book value leaves almost half of that price out of the calculation before the 10 percent cap even applies.

The buyer pool is narrow too. BraunAbility notes that mobility vehicles are a small market, which is why it calls selling to a dealer often much easier than selling privately. Because dealers weigh the condition of the conversion, a repaired floor or door frame is part of what they look at. What buyers and dealers check before making an offer is covered in how to sell a used wheelchair van.

Proving more than the formula

An independent appraisal is how you answer a formula offer. Build the file in this order:

1. Wait for the repair to finish. The claim measures the van as repaired, so you need the final invoice and the shop’s list of repairs, especially anything structural around the lowered floor, door extensions, or ramp mounts. The collision repair guide covers getting that work done and documented.
2. Hire an appraiser who works to USPAP. The Uniform Standards of Professional Appraisal Practice, currently the 2024 edition in effect since January 1, 2024, include standards for personal property, which is where a vehicle appraisal falls. Ask for a written report with the van’s value just before the crash and its value as repaired.
3. Insist on converted comparables. The report should compare your van with sales of accessible vans of similar age, conversion type, and mileage, not plain passenger or cargo vans. Ask a mobility dealer for a written trade-in figure on the repaired van to sit beside it.
4. Send a written demand. Include the appraisal, the repair invoice, damage photos taken before repair, and the van’s maintenance records. If the adjuster replies with a 17c number, ask in writing for the book value, modifiers, and comparables it used.
5. Read every release before signing. A release for the repair that settles all property damage claims ends the diminished value claim too.

North Carolina gives third party claimants a formal route when the two sides stay apart. Under G.S. 20-279.21(d1), when coverage for the claim is not in dispute and the two estimates of lost market value differ by more than $2,000 or 25 percent of the van’s pre-crash retail value, whichever is less, either side can demand an appraisal in writing. Each side names a licensed motor vehicle damage appraiser within 20 days. If the appraisers disagree, they choose an umpire, and if they cannot agree on one within 15 days, either side can ask a magistrate to choose. Either side has 15 days to reject the report, or it becomes binding. You pay your appraiser, the insurer pays its own, and the two of you share the umpire’s cost.

State rules that change the claim

A few states reshape the claim enough to check before you file:

• Michigan. No-fault law limits suits over damage to a vehicle. Under MCL 500.3135(3)(e), you can recover up to $3,000 for crashes after July 1, 2020, and only for damage your insurance does not cover. A claimant more than 50 percent at fault gets nothing, and these cases go to small claims court where possible. Any diminished value has to fit inside that cap.
• Georgia. Diminished value can be claimed on your own policy unless the policy excludes it, as well as from the at-fault driver.
• Texas. The insurance department’s 2000 bulletin splits the two claims: an insurer may owe it to a third party claimant, but owes nothing on a standard personal auto policy once the vehicle is fully repaired. It adds that an uninsured or underinsured motorist claim may include lost market value.
• North Carolina. The appraisal process above applies to vehicle damage claims against a liability policy.

If the van is leased or financed, read the lease or loan agreement before filing. It says who holds title, who may settle damage claims, and whether you will be charged for damage history at turn-in. Have the owner agree in writing before you sign a settlement.

Deadlines to sue over damage to the van

The deadline to sue over damage to property sets how long you can negotiate, and across these four states it runs from two to five years after the crash. Lawyers seldom take on diminished value claims, the NAIC article notes, because the amounts tend to be small, but the deadline still decides when talks have to end.

If the insurer stops answering, get legal advice months before the deadline, not weeks. Claims of a few thousand dollars often fit within small claims limits, which vary by state.

Keeping the van’s history on file

An appraiser and a dealer will both ask what condition the van was in and how well it was maintained before the crash. In HealthRide, each van’s insurance, registration, and other expiration dates are tracked together, and reminders go out ahead of each one. The van check a driver completes in the app before every shift is stored with that shift, which leaves a dated record of the van’s condition before the crash. See fleet management.