7 Tips for Handling Diminished Value Claims in Georgia
A Diminished Value claim is a subset of the Property Damage Claim. Under the Property Damage Claim, you are entitled to towing fees, storage charges, loss of use of your vehicle, repairs and diminished value as long as the sum of the aforementioned does not exceed the fair market value of the car.
Tip #1: Make sure your vehicle is restored to its prior condition.There are two types of Diminished Value: (1) Repair Related Diminished Value and (2) Inherent Diminished Value.
Generally, Diminished Value is defined as the reduction in value of a wrecked and perfectly repaired vehicle. However, the general term Diminished Value is the total of the Repair Related Diminished Value and the Inherent Diminished Value.
Repair Related Diminished Value is the reduction in a vehicle's value because the repairs were not done correctly. For example, if there were paints over spray or the gaps between the panels are not perfectly identical then your would have a Repair Related Diminished Value.
Inherent Diminished Value is the reduction in value of a vehicle assuming that it has been fully restored to its prior condition. This is the definition by the Supreme Court of Georgia. Therefore, any arguments by an insurance company that your vehicle was repaired perfectly and thus there is no Inherent Diminished Value is incorrect. Inherent Diminished Value is a stigma loss to a vehicle. There is a whole industry built around this: CARFAX. The simplest argument for Inherent Diminished Value is that a normal consumer would not buy a wrecked and perfectly repaired vehicle for the same amount as an identical twin vehicle without the stigma of the wreck and repairs.
Tip #2: Hire a credible diminished value appraiser.Once your vehicle is repaired (restored to its prior condition), hire a credible appraiser to appraise the Diminished Value to your vehicle.
The reason why you need to hire an appraiser to appraise the Diminished Value to your vehicle is because the Court consider the appraiser an expert witness, one who can render testimony regarding the Diminished Value based on his/her education, training and experience. Generally, the Court will not let an individual testify about the reduction in value of a vehicle after it has been wrecked and repaired unless the individual has the opportunity to learn about the the value of the vehicle before and after the loss.
A credible appraiser is one that is fair and impartial to you and the insurance company. A credible appraiser is one where his/her methodology in appraising the loss in value to your vehicle is sound (i.e., he/she would apply the same methodology whether he/she is doing the appraisal for you or the insurance company). The same methodology is applied consistently on every appraisals. Generally, a credible appraiser is one who has done work for both individuals and insurance companies and has testified in Court on behalf of both.
Tip #3: Send the proper demand under Georgia laws.In Georgia, demand for Diminished Value are governed by O.C.G.A. 33-4-6 or 33-4-7.
A 33-4-6 Diminished Value demand is usually sent to one's own insurance company. This is what is called a first-party claim. This is usually done by someone who exercised his.her collision, comprehensive or uninsured property damage coverage. Make sure you follow every requirements of 33-4-6.
A 33-4-7 Diminished Value demand is usually sent to the at-fault party's insurance company. This is what is called a third-party claim. This is usually done by someone who chose to let the at-fault party's insurance company repaired his/her vehicle. Make sure you follow every requirements of 33-4-7.
Tip #4: Do not cashed the check that an insurance company sent you for Diminished ValueInsurance companies typically will send you a check for your Diminished Value. On that check will be wordings such as full and final settlement of property damage claim. If you cash this check, you are accepting payments for the Diminished Value claim and releasing the at-fault party or your insurance carrier from all claims relating to the property damage portion of your claim.
Tip #5: Negotiating with adjusters at insurance companiesOnce you properly send the demand for your Diminished Value claim, an adjuster should contact you regarding an offer. The first offer from this adjuster is typically derived from a formula called 17C. Basically, 17C formula takes the fair market value of your vehicle by way of NADA and multiplied it by 10%. Additionally, the formula will take further reduction based on the severity of the damage. Furthermore, the 17C formula will take another reduction based on the mileage of your vehicle. Although mathematically sound, the 17C makes arbitrary assumptions about reduction in value of a vehicle that cannot be justified anywhere.
Tip #6: When should you file suit for your Diminished Value claimRealizing that there is cost associated with filing suit, you must wait the marginal return of filing suit with whatever the current offer is. The typical costs of filing suit on a Diminished Value claim in Magistrate Court is about $600. This includes costs to the Court, cost of service and cost of having the credible appraiser testify at Court on your behalf. For example, if the Diminished Value is appraised at $2,000 and the highest offer from the insurance company is $1,400, you may want to take that. Conversely, if the Diminished Value is appraised at $2,000 and the highest offer from the insurance company is only $400, you may want to file suit.
Tip #7: What you should do when the insurance company appealed your verdictIf you have gotten verdict and the insurance company decided to appeal that verdict, you will want to (1) force them to post a bond for the verdict while the case is on appeal and (2) amend the complaint and tack on a frivolous appeal.