When a car gets damaged in an accident, its value goes down. This is a factor many accident victims in Georgia don’t think about as they are filing a claim for compensation. It’s not the same as financial recovery for the damage itself. Below, we’ll discuss how and why a car’s value diminishes, and why it matters when it comes to making a diminished value car insurance claim. You will need this information if you plan to sell your car at any point in the future.
What Does Diminished Value Mean in Georgia?
An accident is like a scarlet letter for a car. Even if you’ve paid for repairs and the car looks fine, having an accident history usually drops the value—often, by a lot.
When the repairs do not return the car to its original condition, the car will suffer from what’s called “diminished value.” Because the car was damaged in an accident, it’s selling value has decreased. This is also based on the fact that buyers are less likely to trust a car that has been in an accident, even if it appears to be fine.
Inherent Diminished Value
A car will likely have diminished value if the repairs were done incorrectly or poorly. However, in Georgia, a car can also have “inherent diminished value.” This means a car’s value is reduced even when it has been repaired to its best quality, especially if the accident caused major damage.
Diminished Value Versus Depreciation
Diminished value is not the same as the depreciation of a car. Depreciation means a car’s value will decrease over time. This is an expected loss that begins as soon as you buy a car. It has nothing to do with a car accident. Diminished value, on the other hand, is decreased value because of accident related damage.
Can You Include Diminished Value in a Car Accident Claim?
Yes. It’s smart to consider the diminished value of your car when figuring out your damages from an accident. Many car accident victims do not realize this is an option.
If your accident was caused by another driver’s negligence, you have the right to recover damages from them, according to Georgia Code § 51-1-6 (2018). The diminished value of a car may prevent you from selling it for as much as you would have before the accident. This is a loss caused by the accident, which means it can be included in the damages you recover.
Facts About Diminished Value Insurance Claims in Georgia
You should also know that:
- If you qualify for diminished value, insurance companies must pay it
- You can file a claim for diminished value whether you were at fault for the accident or not
- A diminished value payout does not increase your insurance premium
How to Make a Claim for Diminished Value in Georgia
Most insurance companies will not mention or offer to cover the loss caused by diminished value. They often hope you don’t know about this option, so you will need to pursue it yourself.
As soon as you start the claims process, ask the insurance company about diminished value damages. You have the legal right to claim money you could lose if you sell your car at any point in the future.
Calculating the Diminished Value of Your Car
To calculate the diminished value of your vehicle, you will need to:
- Find out the value of your car both before and after the accident
- Calculate the difference.
You will probably need to take your car to a mechanic for an accurate appraisal of the post-accident value.
Also, make sure you go to a qualified, well-rated shop for any repairs. Poorly-repaired vehicles can have a higher diminished value. However, if you do end up with low-quality repairs, you may be entitled to higher compensation to cover the decrease in value.
Include the Diminished Value with Your Damages
After you have an accurate diminished value for your car, you will need to list it with the other damages in your injury claim. From there, the insurance company will review your entire claim and decide how to respond. They will either accept your claim, offer a lower settlement, or deny the claim.
If the claim is not accepted, contact a car accident attorney in Georgia right away. They can examine the claim, the reason for denial or lower offer, and help you negotiate a fair dollar amount.
Reasons You May Not Qualify for Diminished Value Recovery
Your claim may be denied if you do not qualify for a diminished value payout. This can happen if your car:
- Did not suffer from significant damage from the accident (usually less than $500)
- Was not worth very much to begin with (under $7,000)
- Has over 30,000 miles per year
- Is around 10 years or older
- Has been declared a total loss
- Has suffered a lot of damage from several previous accidents
You are also not eligible if the car has a branded title or the Georgia statute of limitations has passed.
If you need help with your diminished value claim in Georgia, call John Foy & Associates at (404) 400-4000. We can help you seek the settlement you deserve. To schedule a FREE consultation, call (404) 400-4000 or contact us online today.