Diminished value claim Georgia – Georgia is best state in the country to get compensated for a diminished value claim. There are laws in place obligating insurance companies to pay you diminished value on first party and third party claims. You can recover diminished value under your own insurance policy (first party claim), even if the accident was your fault. This even includes comprehensive claims such as a deer hit or vandalism as well.
Georgia courts have found that the measure of damages in a third party action is the difference between the value of the vehicle before and after the collision or other negligence or in cases where the owner repairs the vehicle, the measure is the reasonable value of labor and material used for the repairs and the value of any depreciation (permanent impairment) after the vehicle was repaired, provided the aggregate of these amounts does not exceed the value of the vehicle. Perma Ad Ideas of AM.,Inc. v. Mayville, 158 GA. App. 707 (1981). In layman’s terms, this means you are can recover repair costs and your vehicle’s loss in value because of the accident.
The most well known case is State Farm Mutual Insurance Company v. Mabry, 556 S.E.2d 114 (Gs. 2001). The Georgia Supreme Court held that insurance companies have a duty to evaluate all first party physical damage claims for diminished value, just as they evaluate other elements of damage, and to adopt a suitable methodology for doing so.
Diminished value claim Georgia and the 17c Formula
In the State Farm v. Mabry case mentioned above, a formula arose that was only intended for use in that particular case. This model, known as the “17c formula” was used to settle claims for a class of 25,000 claimants. It was created using a simple methodology specifically for that case because of the large number of claimants and the need for a quick, easy, and predictable means to evaluate each claim. It was not created to apply to individual claims where better methods of estimation are available.
Since then, many insurance companies have adopted the 17c formula in an effort to reduce the amount of diminished value claim Georgia payouts. The 17c formula is a tactic widely used by the insurance industry to control and cap diminished value payouts without regard to the unique circumstances of a claim. In response to this abuse, the Georgia Insurance Commissioner issued a directive to all insurance carriers stating they do not endorse the use of that formula. The directive states in part the following;
“It has come to our attention that certain carriers are incorrectly suggesting to their insureds that the Department has approved a specific formula for determining diminution of value. It also has come to our attention that certain carriers are incorrectly suggesting to their insureds that the diminished value result arrived at by the carrier’s use of a selected formula reflects the definitive amount to which the insured is entitled under Mabry and for which the insurer may be liable. The purpose of this Directive is to clarify the Department’s position as it relates to diminution of value claims.
The Department has never promulgated or produced by regulation any formula for use in the determination of diminution of value as it relates to physical damage claims nor has the Department endorsed any specific formula or method.
The Department also has never indicated that the diminished value result obtained by a carrier’s use of a particular formula or method constitutes the definitive determination of the carrier’s liability to its insured. The nature of each claim demands that carriers must take into consideration all relevant information in the evaluation of diminished value claims including, but not limited to, relevant information provided by an insured regarding diminution of value.”
Other laws that support Georgia diminished value claims
In Georgia, there are two additional statutes, O.C.G.A. 33-4-6 and O.C.G.A 33-4-7 that put even more pressure on insurance companies to handle diminished value claims fairly. The purpose of these statutes is to facilitate the quick and fair adjustment of claims, including diminished value claims in Georgia.
Insurers must adjust claims fairly and promptly, make a reasonable effort to investigate and evaluate these claims, and make a good faith effort to settle for a fair amount. If the insurance company acts in bad faith or breaches these duties, they may be liable to pay in addition to the actual loss, a penalty of up to 50 percent of the total claim amount or $5,000, whichever is greater, plus all reasonable attorney fees.
To trigger these statutes, it’s recommended to make a written 60-day time limit demand by certified mail, return receipt requested with the amount that you’re willing to settle for.
What you can do about a diminished value claim Georgia
With all of these laws, statutes, and case law on your side, you are in a very strong position to negotiate a fair settlement for your Georgia diminished value claim. If the insurance company makes an offer based on the 17c formula or if you feel their assessment is low and unfair, the best course of action is to obtain an appraisal of your diminished value.
DVCHECK’s licensed appraisers can help you with a world class diminished value recovery process that will assist you in documenting, demanding, negotiating, and recovering your vehicle’s lost value.