When a car is damaged and repaired in a Georgia car accident, it is not “as good as new” when fixed. Diminution in value or diminished value generally applies only to cars that have not been in a wreck before. The idea is that in this day and age of Carfax and vehicle background checks everyone will know if the car was in a wreck when you try to sell it. No one will pay the same price for a used car when choosing between a previously repaired car and an undamaged one.
If the car is in a wreck and fixed and it is not a high mileage clunker, there will be a diminution in the resale value of the car no matter how well it is fixed. The hard part is determining what that value is. There are many “experts” that can be found on the internet, but I have found that if you and the insurer are far apart on this number, long distance experts really won’t help.
If you had a newer car and it received over $1,000.00 in damage, it is worth looking twice at their offer.
1. Make sure you ask them for their estimate of diminution in value figure and how they reached it.
2. In Georgia, most carriers have a formula they use and they will not tell you what it is. This all stems out of a delightful appellate case called Mabry v. State Farm. Here is a cool article that gets more into the details about the formula for diminished value. http://www.consumercollisionservices.com/mabry-vs-StateFarm.pdf
3. The only way to deal with the problem is to go to a real expert like a used car salesman or someone in the wholesale business, get an opinion and file the case in small claims court.
Lets get a real world example. I recently had a client with $6000 in damage to her Toyota 4-Runner. Thats a great truck that sells well on the resale market and it was some significant damage. The insurance company offered her $82.00 for the diminution which is just silly. I called the adjuster and let her know that I used to represent the carrier an that we never used to do business that way. She confessed that she had no latitude in the number and that it was derived from a formula and reached because the client had 70,000 miles on the truck. We ended up filing suit for her injury claim and the diminution and worked out a $500 settlement on the diminution in addition to settling the injury claim. $500 is much closer to the real world value of the diminution in value.
Bottom line. Be persistent but understand that you may have to take the claim to small claims court. Lawyers will not touch a case like that unless we are talking about a very expensive car.
The leverage you have is that there is a bad faith property damage claims
Follow this statute in your letter stating your evidence of your diminution in value and you may get good results
§ 33-4-7 is the law that lays out what the insurance company has to do. The insurance company has to “adjust that loss fairly and promptly” and must “investigate and evaluate the claim.”
If it is pretty clear they are responsible and don’t do their job, then they may have to pay an extra penalty of up to 50% of the repair or $5,000.00, whichever is bigger.
To trigger this law, you must mail to the insurer a demand letter, certified or Fed Ex with the exact demand number. They then get 60 days to decide whether to agree or not. If they don’t agree and you win at least that number, you get the penalty.
If you are going to sue, then serve the insurance company in addition to the driver that caused the car accident in Georgia. You also have to mail a copy of the demand for payment and the lawsuit to the Georgia Insurance Commissioner’s office within 20 days of filing the lawsuit.
Be sure to read more on our Athens, Georgia injury lawyer website!