Diminished Value Claims: Georgia
Georgia is the best state in the country for filing a diminished value claim. This state’s laws obligate insurance companies to pay diminished value on first-party and third-party claims.
You can recover diminished value in Georgia through your own insurance company even if the accident was your fault. This even includes comprehensive claims such as deer hits and vandalisms.
Summary – Georgia Diminished Value Claims
Statute of Limitations: 4 years
Third-Party Diminished Value Claim: Yes
First-Party Diminished Value Claim: Yes
Georgia Property Damage Minimum Limits: $25,000 in coverage
Uninsured Motorist Coverage for Diminished Value: Yes, insurers in Georgia must offer UMPD. However, you can reject this coverage in writing. UMPD covers hit-and-run drivers when contact between two automobiles occurs.
Underinsured Motorist Coverage for Diminished Value: Yes, it is an optional coverage
Georgia Small Claims Court Limit: $15,000, attorney representation and appeals are permitted
How To File a Diminished Value Claim in Georgia
- Step 1. Prove Your Loss: First, you need to prove that lost value occurred. You can acquire this information by receiving an independent, unbiased appraisal.
- Step 2. Submit Your Proof to the Insurance Company: You must also submit a diminished value appraisal and demand letter to the insurance company for review.
- Step 3. Claim settlement. Submitting an appraisal from a competent professional should cause most insurance providers to make you a settlement offer. From there, the insurance company has the option to pay your claim in full, make a counteroffer, or deny your claim.
Most Georgia insurance policies include an appraisal clause provision that you can invoke in situations where your diminished value in Georgia is being underpaid.
The appraisal clause option allows your designated independent appraiser to negotiate a settlement with an independent appraiser appointed by your insurance company which typically results in a higher claim settlement.
DVCHECK is here to help. We help individuals with diminished value claims in Georgia. Have questions? Call us at (850) 201-1950 or request an estimate from DVCHECK online.
Georgia Diminished Value Law
Georgia courts have found that the measure of damages in a third-party action is the difference between the value of the vehicle before and after the collision or other negligence or in cases where the owner repairs the vehicle, the measure is the reasonable value of labor and material used for the repairs and the value of any post-repair depreciation so long as this aggregate amount doesn’t exceed your automobile’s value. Perma Ad Ideas of AM., Inc. v. Mayville, 158 GA. App. 707 (1981).
In layman’s terms, this means you can recover repair costs and your vehicle’s diminished value.
In Georgia, there are two statutes, O.C.G.A. 33-4-6 and O.C.G.A 33-4-7 that put pressure on insurance companies to handle diminished value claims fairly. The purpose of these statutes is to facilitate the quick and fair adjustment of claims, including diminished value claims in Georgia.
Insurers must adjust claims fairly and promptly, make a reasonable effort to investigate and evaluate these claims and make a good faith effort to settle for a fair amount.
If the insurance company acts in bad faith or breaches these duties, they may be liable to pay in addition to the actual loss, a penalty of up to 50 percent of the total claim amount or $5,000, whichever is greater, plus all reasonable attorney fees.
To trigger these statutes, it’s recommended to make a written 60-day time limit demand by certified mail with a return receipt requested that includes the amount you’re willing to settle for.
The most well-known court case is State Farm Mutual Insurance Company v. Mabry, 556 S.E.2d 114 (Gs. 2001). The Georgia Supreme Court held that insurance companies have a duty to evaluate all first-party physical damage claims for diminished value in Georgia, just as they evaluate other elements of damage.
17c Formula and Diminished Value Claims in Georgia
In the State Farm v. Mabry case mentioned above, a formula arose that was only intended for use in that case. This model, known as the “17c formula” was used to settle claims for a class of 25,000 claimants. It was created using a simple methodology specifically for that case because of the large number of claimants and the need for a quick, easy, and predictable means to evaluate each claim.
Since then, many insurance companies have adopted the 17c diminished value formula in an effort to reduce diminished value claim payouts in Georgia. This formula is flawed and is designed to control and cap diminished value payouts without regard to the unique circumstances of a claim. In response to this abuse, the Georgia Insurance Commissioner issued a directive to all insurance carriers stating they do not endorse that formula.
The directive states that “the nature of each claim demands that carriers must take into consideration all relevant information in the evaluation of diminished value claims including, but not limited to, relevant information provided by an insured regarding diminution of value.”
To properly document your claim, hire a qualified diminished value appraiser who specializes in calculating diminished value in Georgia. They will evaluate your vehicle, compare it to similar vehicles with an accident history, and create a comprehensive appraisal report estimating its diminished value.
An accurate appraisal is vital for supporting your claim and securing a fair payout.
