If you were in a car accident, part of your insurance settlement could account for the diminished value of your vehicle. This part of the settlement is designed to compensate you for the loss in value of your vehicle even after repairs are made. Because this concept is subjective, insurance companies use different calculation methods to determine diminished value. These methods are not always fair and accurate.
The results of a Georgia diminished car accident value calculation may not always work out in your favor. If you believe that the insurance company undervalued the long-term damage to your vehicle, it is important that you do not accept their settlement offer. A car accident attorney serving Georgia could help you evaluate your vehicle and determine your next course of action.
What Does Diminished Value Mean?
Diminished value is not a legal concept that is relevant in most vehicle accident cases. Also known as the diminution of value, diminished value is the value of a motor vehicle that is lost even after it is repaired. There are times when no amount of repair work can completely undo the damage resulting from an accident.
Diminished value is different from depreciation. Vehicles are known as depreciating assets, as their value continues to go down with use. Wear and tear along with years of use naturally lead a vehicle to lose value over time.
Diminished value is a loss in value beyond depreciation. This loss in value occurs because of an accident or other form of damage. In some cases, a vehicle that is fully repaired will never return to the condition it was in prior to the crash.
Georgia Law Provides Insurance Companies with a Formula for Diminished Value
In determining that insurance companies had an obligation to cover the diminished value of their driver’s vehicles after an accident, the Georgia Supreme Court developed a formula designed to estimate diminished value.
This formula, which is known as 17c, is routinely used by Georgia insurance companies to evaluate the diminished value of a car after an accident. There are multiple steps to this evaluation process. This process includes:
- Calculating the base value of your vehicle
- Apply an arbitrary cap of 10% of your base value
- Adjust the lost value based on the severity of the damage
- Reduce the diminished value claim further based on the vehicle’s mileage
Why 17c Evaluations Can Be Unfair and Inaccurate
There are issues with the 17c calculation, and they typically do not work out in favor of the insured driver. In general, miscalculations in this formula are amplified given that each element is compounded with another. For example, a mistake in the initial valuation of your vehicle will continue to skew the results of the calculation through every step of the process.
There are specific issues with this calculation that also favor the insurance company. For example, the formula considers mileage twice. Mileage is already considered in the base estimation of the vehicle’s value. It is then used to reduce the value of the vehicle further a second time.
There are other issues with this calculation as well, including the arbitrary 10 percent lost value and the inability for the calculation to consider how resale prices can vary by location.
Offering an Alternative Estimate Is Important
It is generally in your best interest to prepare your own valuation in addition to the calculation made by the insurance company. While insurance companies rely on the 17c formula, it is important to understand that these calculations are not legally binding. Many – if not most – vehicles have unique factors that make the valuation through this formula inaccurate.
Providing your own valuation also gives yourself a point to negotiate from. Instead of simply rejecting the amount offered by the insurance company, you could counter with your own valuation. This could improve your chances of resolving your diminished value case in a favorable way.
There are numerous third-party providers that could estimate the value of your vehicle. Relying on these fair estimates could be a useful tool in your case and assist your attorney with recovering the accurate diminished value of your vehicle.
Let Our Firm Help with Your Georgia Diminished Value Case
It is common for insurance companies to use the Georgia diminished car accident value calculator, but you are not bound by the figures the calculation provides. You have the right to perform your own evaluation and refuse to accept unreasonable settlement offers.
Diminished value claims can be confusing, but the right attorney could help you navigate the system. George Sink, P.A. Injury Lawyers is ready to help you pursue fair compensation for your property damage claims. We have 40 years of experience1 and work on a contingency-fee basis, so there are zero financial risks when you work with us.* Call (888) 612-7001 right away for your free, no-obligation consultation with a team member.