Diminished value is the difference between your car’s value before the accident and its value after it has been repaired. If your car was damaged in an accident in Georgia, you are entitled to recover its diminished value from the insurance company—even if the accident was your fault.
After an accident, mechanics and body shops may do an expert job, making your car look “good as new.” But the accident will remain in your car’s history, like a dirty little secret that makes your car worth less than it was before the accident. Georgia law recognizes this, and allows you to make a diminished value claim.
If my car was fixed, why is it worth less?
There are two reasons. First, the repairs might have been done poorly, so the car doesn’t look or run like it did before the accident. Even if the repairs are perfect, as a practical matter people don’t place as much value on a car if it’s been in an accident. It may be harder to sell, and you may get less money for it.
To understand this, imagine that you find two similar used cars that you like. They both appear to be in the same condition, and they each cost $20,000. But when you look at the vehicle history, you find out that one of the cars has been in an accident that caused $10,000 worth of damage. Would you still consider that car, knowing about the accident? How much would the seller have to take off the price before you would put it on an even footing with the other, accident-free car? This amount is the diminished value.
How do I know what my car’s diminished value is?
It can be hard to put a dollar value on your car’s decrease in value because of an accident. Insurance companies like to use a formula known as the “17c” formula because it allows them to calculate a low diminished value and avoid paying you much. You should know that the Georgia Insurance commissioner has made it clear that there is no set value or formula for diminished value.
This means that you will need to do some research on your own to find out what your car’s diminished value might be. Having an idea of the value puts you in a stronger position to negotiate more money from the insurance company.
One way to do this is to use online tools like Kelley Blue Book and Edmunds to find out what your car should be worth, in your area. Then either look at listings online for cars that have been in an accident, or ask a used car dealer what they would pay you. The difference between what your car should be worth and what you can actually get for it should give you some idea of the diminished value. In general, the more damage your car had, the greater its value will diminish.
Will the insurance company automatically give me money for the diminished value?
Probably not. Car insurance companies don’t like to pay out claims unless they have to, and they usually won’t tell you about diminished value unless you ask. If they offer you money for car repairs and your injuries, that money will probably not include the diminished value, even though you are legally entitled to it. Worse, when you accept money from an insurance company, you will probably have to sign away your right to recover additional money in the future.
If the insurance company says they will use a formula to figure out your diminished value, be wary. Any insurance company “formula” will almost certainly favor the insurance company and lead to a lower payout for you. If you have injuries in addition to vehicle damage, the best way to ensure you get a fair deal on your diminished value claim is to let car accident attorneys in Atlanta handle your claim for you.
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Our lawyers know how to get you money after an accident. We don’t charge you anything unless we are able to get money for you. Let us give you a FREE consultation to answer your questions and help you make a claim—with no obligation. Call us at (404) 341-6555 or fill out the form to the right to get your free consultation today.