The formula is a bit more complicated than that, but in a sense , yes. Here's the actual formula and explanation:
ELEMENTS OF LOSS OF VALUE FORMULAS
ACV - For purposes of our calculations, we will use the NADA retail value, including additions and subtractions for options and mileage. The NADA edition applicable at the time of loss of value claim is presented should be used.
BASE LOV - As is the case in most loss of value formulas, we will use 10% of the ACV as a starting point in our formula.
DAMAGE SEVERITY MODIFIER - This is the subjective decision which must be made by the adjuster. The nature and extent of damages should be based on the actual physical damage sustained by the vehicle, without using the cost to repair as a basis. The modifier can be from 0.0 to 1.0 with 1.0 reflective of extensive damages. It should be stressed that in some minor accidents the 0.0 modifier is appropriate as no loss of value would have been sustained. A basic guide for the damage severity modifier is as follows:
MODIFIER EXTENT OF DAMAGE
1.0 Severe damage to the structure of vehicle.
0.75 Major damage to structure and panels.
0.50 Moderate damage to structure and panels.
0.25 Minor damage to structure of vehicles.
0.0 No structural damage and replaced panels.
As this is subjective decision, the modifier can be adjusted as necessary to fit the damages. (EXAMPLE 1 - No frame damage, a replaced bumper and repaired body panel may call for a modifier of 0.1.
EXAMPLE 2 - Heavy frame damage to the front with moderate additional damage to the rear may call for a modifier of 0.85.)
MILEAGE MODIFIER - Generally, when a vehicle reaches 100,000 miles, it no longer has a realistic market value. There may be some cases where that is not so, but for most cars this figure should be accurate. The modifier is a factor of the actual mileage of the vehicle and the mileage where the vehicle no longer would be considered for retail resale by a dealer. The modifier can be from 0.0 to 1.0 reflective of zero miles. A basic guide for the mileage modifier (based on 100,000 mile limit) is as follows:
The modifier should be adjusted to reflect the actual mileage based on the following:
MODIFIER - MAXIMUM MILES FOR RETAIL SALE - ACTUAL MILES
MAXIMUM MILE FOR RETAIL SALE
APPLICATION OF LOSS OF VALUE FORMULA
10% of ACV x Damage Modifier x Mileage Modifier = Loss of value
So, all that said, even if the car was worth $50,000, you take 10% of that or $5,000 multiplied by the damage modifier (which at most favorble to them say it is .25) multiplied by the mileage midifier of 1.0 and you still get $1,250! The question is where in the damage modifier is a quarterpanel and bumper? And that's if you use THEIR formula which does not accurately represent the real diminished value. I can see this is going to be some real fun. They didn't even offer what their own formula would say is fair at the lowest classification of damage!