Can You File a Diminished Value Claim After a Georgia Car Crash?

If your car got damaged in a collision, you might wonder, Can you file a diminished value claim after a Georgia car crash? The answer is yes, often you can. 

There are certain rules regarding how diminished value claims work in our state. In general, however, Georgia allows people to seek a recovery of these losses when a vehicle is damaged in a crash.

An Overview of the Concept of Diminished Value Claims

People usually do not think about the diminished value of their vehicle after the repairs get performed—until they go to trade in their car and buy a new one. At that time, the car salesperson will then run your car through CarFax or a similar database. The report will reveal the accident history of your vehicle, then tell you that, because your car was in a collision, the dealership will offer you thousands of dollars less on your trade-in.

At that point, the repaired collision damage takes money out of your pocket. If you were not at fault for the accident, you might feel that this financial loss is unfair—and you would be correct. 

Therefore, your car accident insurance claim or personal injury lawsuit could include a demand for compensation for the diminished value of your vehicle.

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The Duty to Pay Diminished Value Claims

The Supreme Court of Georgia ruled in State Farm v. Mabry that automobile insurance companies have a duty to pay the diminished value of their vehicles after a collision in addition to paying for the repair to the car. The court did not order insurers to notify claimants of this type of money damage, and insurance companies routinely do not tell people about the availability of this compensation.

How Rule 17c Can Affect the Amount of a Diminished Value Claim

In response to the Mabry case, auto insurers have tried to justify low payouts on diminished value claims by using an unfair formula called “Rule 17c.” Some insurance companies implied that the Office of Commissioner of Insurance and Safety Fire authorized the use of the Rule 17c formula to calculate diminished value. However, this isn’t the case. 

Specifically, insurance companies use this rule to place arbitrary limits on the amount victims could seek for a diminished value claim. Many personal injury lawyers argue that the Rule 17c formula is unfair to consumers and results in lowball offers.

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Types of Diminished Value Claims

There are three ways that getting damaged in a collision could reduce the value of your car, either before or after the vehicle gets repaired.

1. Immediate diminished value. This refers to the loss in the resale value of your damaged vehicle before repairs. The fact that a car has sustained damage from the impact of a crash immediately places the vehicle in the category of damaged goods.
2. Diminished value from the repairs. Sometimes the repairs the car has after an accident do not restore the car to like-new condition. You might be able to see some cosmetic damage or there could be structural issues after the repairs. Even with a competent repair shop, some damage cannot be fixed to the point of looking as if nothing ever happened. Also, incomplete or incompetent repairs can diminish the value.
3. Inherent diminished value. This value is given after a vehicle gets repaired following damage in a crash. This type of claim argues that your car’s value is still diminished from its pre-accident value, even after you had repairs. 

To test the theory of whether diminution of value is a valid financial loss, simply ask yourself if you would pay the same amount of money for a car that had been in a significant crash as you would for an identical car with no accident history. Many people will refuse to buy a vehicle at all if it got damaged in a collision, no matter how good it looks now.

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Requirements for Seeking Diminished Value Compensation

You cannot collect diminished value money damages if you have an old, high-mileage car or one that did not sustain much physical damage. Only vehicles that meet all of these requirements can qualify for diminished value compensation in Georgia:

• The car has a substantial market value, defined as more than $7,000.
• The damage cost more than $500 to repair, or the repair estimate exceeded this amount.
• The car’s mileage is average or below average for its model year.
• The vehicle is under ten years old.
• You have a clean title to the car.

Also, you must file your claim for diminished value before the statute of limitations expires.

How Long You Have to File a Diminished Value Claim

Under Georgia law, you have limited time to file a lawsuit seeking compensation for diminished value to your vehicle. After the deadline passes, the insurance company will not negotiate with you because they have no legal obligation to pay your claim after the statute of limitations runs.   

We understand that these claims can be confusing. Bader Scott Injury Lawyers help people who suffer personal injuries and diminished value from a car accident. You can contact us today for a free case review. We can tell you everything you need to know about filing a diminished value claim after a Georgia car crash.

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