When you are involved in a car accident in Georgia, the financial recovery you pursue is not limited to medical bills and repair costs. One important factor that many accident victims overlook is a car’s diminished value after an auto accident. Understanding how diminished value claims work is essential to securing fair compensation.
Our Alpharetta car accident lawyers at Horst Shewmaker are here to help you recover the compensation you deserve. Contact us today for a free case evaluation.
What Is Diminished Value?
Diminished value refers to how the value of your car decreases after a collision, even if it has been repaired to its pre-accident condition. A car that has been in an accident has a lower resale value. This loss in value occurs because the vehicle now has an accident history, which can make it less attractive to potential buyers, even if repairs have been carried out perfectly.
For instance, imagine you own a car worth $20,000 before an accident. After repairs, even though the vehicle looks and drives as it did before, buyers may only be willing to pay $17,000 because they know it has been in a collision. That $3,000 loss is the diminished value.
Inherent Diminished Value
Inherent diminished value is a specific type of diminished value that refers to the loss in value simply because the car has an accident history, regardless of the quality of the repairs. This means that even if your vehicle is restored to like-new condition after a crash, the fact that it was involved in an accident causes a drop in its market value.
Diminished Value vs. Depreciation
It’s important to distinguish between diminished value and depreciation. Depreciation is the decline in a vehicle’s value over time as it ages and accumulates mileage. Normal depreciation happens to every vehicle over time, but a diminished value is directly tied to a vehicle’s accident history.
Diminished Value in Georgia Accident Claims
If you were involved in a car accident with a negligent driver, you have the right to pursue compensation for repair costs and the decline in your car’s market value.
The at-fault driver’s insurance company is typically responsible for covering these losses. However, insurance companies rarely offer this compensation upfront. They often rely on claimants being unaware of diminished value claims, so it is important to be proactive and assert your rights.
Criteria for a Diminished Value Claim
To qualify for diminished value recovery, your car must meet certain criteria:
- Significant damage: Insurance companies require at least $500 in damage for a diminished value claim.
- Age: Your vehicle must be less than 10 years old.
- Market value: Your car must have been worth at least $7,000 before the accident.
- No Branded Title: Vehicles with a branded title don’t qualify for diminished value damages. A branded title indicates the vehicle has a history of significant damage or other major issues.
- Accident History: The vehicle should not have extensive damage from previous accidents.
Calculating Diminished Value
In Georgia, insurance companies often use the 17c Diminished Value Formula to calculate a vehicle’s diminished value. The formula was created in the State Farm v. Mabry lawsuit heard by the Georgia Supreme Court.
The formula involves the following steps.
Determine Pre-Accident Value
The first step is to figure out the value of your car before the accident. This can be determined using trusted sources such as the Kelley Blue Book (KBB) or the National Automobile Dealers Association (NADA).
These resources will provide an estimate based on details like the make, model, year, mileage, and overall condition of your car. By entering this information, you will get a reliable pre-accident value, which is the foundation for calculating the diminished value.
Apply a 10% Cap
Once you have determined the vehicle’s pre-accident value, the next step is to apply a 10% cap. This cap limits the maximum diminished value you can claim. The rationale behind this cap is that most vehicles, even after extensive repairs, should not lose more than 10% of their pre-accident value.
For instance, if the pre-accident value of your car is $20,000, then the base diminished value would be $2,000. This figure represents the highest amount you could potentially claim in diminished value.
Damage Multiplier
The damage multiplier is based on the extent of the damage sustained by the vehicle in the accident. This multiplier ranges from 0.00 (representing no structural damage) to 1.00 (representing severe structural damage). A 0.00 represents no structural damage, and 1.00 indicates major structural damage.
- 1.00 = Severe structural damage
- 0.75 = Major damage to structure and panels
- 0.50 = Moderate damage to structure and panels
- 0.25 = Minor damage to structure and panels
- 0.00 = No structural damage or replaced panels
For example, if your vehicle sustained moderate damage to the structure, the multiplier might be 0.50. In this case, the $2,000 base diminished value would be adjusted to $1,000.
Mileage Multiplier
A final multiplier is applied based on the vehicle’s mileage. Cars with higher mileage will receive a lower multiplier, as they would naturally be worth less due to wear and tear. The mileage multiplier ranges from 0.000 to 1.00.
- 1.00 = 0 – 19,999 miles
- 0.80 = 20,000 – 39,999 miles
- 0.60 = 40,000 – 59,999 miles
- 0.40 = 60,000 – 79,999 miles
- 0.20 = 80,000 – 99,999 miles
- 0.00 = 100,000 miles or more
If your car had 20,000 miles, you would multiply $1,000 by 0.80, resulting in a final diminished value of $800.
Determining the diminished value of your car is complicated, but a car accident attorney can help you calculate all your damages and pursue the maximum compensation.
How to File a Diminished Value Claim in Georgia
Filing a diminished value claim in Georgia requires you to follow specific steps, and the process can be overwhelming without proper guidance. Here’s what you need to do:
Gather Evidence
Documenting the accident and car repairs is essential. Immediately after the accident, take detailed photos of your car’s damage from multiple angles, collect witness statements if available, and file a police report.
Keep copies of all repair estimates, invoices, and any relevant documentation from the body shop. This documentation will serve as evidence when filing your car accident claim, demonstrating the extent of damage your car sustained and the repairs it underwent.
Document Your Car’s Diminished Value
You must gather proof of your car’s lost value. Start by obtaining a pre-accident valuation of your vehicle. This can be done using tools such as the Kelley Blue Book. You will also need an accurate appraisal of your vehicle’s diminished value, which can be done by a reputable body shop or a professional appraiser.
Filing a Car Accident Claim
Inform the at-fault driver’s insurance company about the accident and ask about the process for a diminished value claim. Make sure to do this early in the insurance claims process. When filing your claim accident claim, you will include diminished value along with other costs such as rental car fees.
It’s important to note that under Georgia law, you must file a property damage claim within four years of the accident. The deadline for a personal injury lawsuit is usually two years from the date of the accident.
The insurance company will likely assign insurance adjusters to review your claim, and they will conduct their own diminished value calculation. The insurance company’s first offer may not fully reflect the true lost value of your vehicle.
Negotiate with the Insurance Company
Negotiating a settlement is often the most challenging step. Insurance adjusters may offer a lower settlement than you expect, often based on their own diminished value calculation. A qualified car accident attorney will ensure that your rights are protected during the negotiation process.
If the insurance company offers a lower settlement or denies your claim, a car accident lawyer can fight for proper compensation.
Why Work with Horst Shewmaker?
At Horst Shewmaker, we understand the complexities of diminished value claims in Georgia and are committed to helping our clients navigate the process. With extensive experience handling car accident cases, we provide personalized, professional representation to ensure that you receive the compensation you deserve for all your losses.
If you have been in a car accident and believe you are entitled to compensation for your vehicle’s diminished value, don’t hesitate to contact our Alpharetta office. We offer a free consultation to discuss your case and help you understand your options.
Contact Us Today for a Free Case Evaluation
Diminished value is a significant aspect of car accident claims that can often be overlooked. Understanding how it works and how to file a claim in Georgia can mean the difference between a fair settlement and leaving money on the table.
At Horst Shewmaker, we are here to help you through every step of the process, ensuring that your rights are protected, and you receive the compensation you deserve for the diminished value of your vehicle. Contact us today at (404) 400-1175 for a free consultation and learn more about how we can assist with your car accident claim.
