DIMINISHED VALUE CLAIMS
What Is Diminished Value?
Diminished Value (“DV”) is the loss in a vehicle’s value as a result of having been damaged. Depending upon the severity of the sustained damages and the quality and thoroughness of the repair, a portion of its original value is restored; the extent of which must be determined by a recognized Diminished Value Expert (Expert Asset Protection). The remaining difference between the vehicle’s original pre-loss value and the restored value is considered the “Diminished Value”.
CAR #1: No Prior Accidents
$42,390
Fair Market Value
20,000 Miles
4D SUV
Regular Maintenance
CAR #2: Wrecked & Repaired
$33,750
Fair Market Value
20,000 Miles
4D SUV
Regular Maintenance
$8,640 Diminished Value
What is 17c?
The 17c Formula is used by many insurance companies to make initial offers of diminished value to their customers. You may even be told in Georgia that the formula is “authorized” or even “mandated” by the State … FALSE!! There is NO formula mandated by any government agency when it comes to determining diminished value.
The formula places an arbitrary cap on your loss and then whittles away from there. It is unfair and in no way serves to accurately consider your actual loss.
Example 17c Calculation:
Your Vehicle’s Value = $50,000
Starting point for 17c = $5,000 (10% of Value)
Mileage modifier (60,000 miles) = .4 (moves to $0 at 100,000 miles)
Damage modifier (small wreck) = .25 (moves to 1 as damage increases)
$5,000 x 0.4 x 0.25 = $500 … your ACTUAL loss could be $10,000 or more
Example Diminished Value Claim:
Your one-year-old vehicle is worth $50,000. One day, you're hit by another car, causing $6,000 in damage. Your insurance company pays for the repairs. Your newly repaired car is still worth, $50,000 right?
WRONG!
Although your body shop does an excellent job, and your vehicle looks as good as it did before the accident, it's now much less desirable having been in a collision. This can impact your vehicle's value by as much as 40% …… Far more than the arbitrary 10% cap of the 17c formula!
When you try to sell/trade the vehicle, the buyer would no longer be willing to pay you $50,000, but instead might offer $39,000. In this case, the diminished value would be $11,000.
$50,000 before accident - $39,000 sale price = $11,000 in DV!
Your claim for diminished value can be paid by your own insurance company or the other party's company.
DV Law in Georgia
Georgia is the only state where you can demand diminished value compensation if you are the 1st Party. You can rightfully expect diminished value compensation in ALL 50 states if you are the 3rd Party. The Supreme Court of Georgia, in "State Farm Mutual Automobile Insurance Company v. Mabry et al., 274 Ga. 498 (2001)," ruled that insurers owed their insured for Diminished Value of their vehicle following an accident. In response, insurance companies in Georgia have attempted to utilize a Diminished Value formula referred to as "Rule 17c." (17c is discussed on our Diminished Value page). Typically, the 17c formula pays pennies to the dollar of what is really owed to consumers for Diminished Value.
If you are a resident of Georgia give Expert Asset Protection a call today. You will talk to an expert adjuster who will inform you of your rights free of charge. If you are not being offered a fair amount for Diminished Value we can help you dispute the settlement amount by asserting the “Appraisal Clause” in your policy (if you are the 1st party). Be certain, and exercise your right to a competitive appraisal.