Georgia Auto Accidents: What Is Diminished Value?

When people get hurt in a car wreck, the first priority must always be treatment for any injured people. Later, there are property damage issues to deal with as well.

These claims for damage to vehicles often turn sour because dealing with insurance companies in general can be stressful. After the accident, getting compensated for damage to your car can often take too long.

If you have a car accident and your car is damaged in that wreck, you need to make a claim with an insurance company to have your vehicle repaired, assuming it is not totaled. However, what a lot of people don't realize is that your car is never going to be valued the same as it was prior to being in the wreck. Even if the insurance company pays for the repairs, your vehicle will be worth less than it was worth prior to the accident. This will be a problem when you decide to sell your car.

The difference between what your car was worth before and after the accident is called "diminished value". Diminished value is an automatic loss in value as a result of a vehicle being in a collision. Statistics show that 55% of car shoppers are not as likely to buy a car that has been involved in a wreck. About 81 percent of people shopping are going to offer substantially less money for the vehicle, if they even make an offer at all.

Buyers, who are purchasing cars these days, including dealerships that are taking trade-ins, are using services provided by companies like Carfax. These companies obtain information about your vehicle using the VIN number. This information is going to include any prior accidents that the vehicle has been involved in.

Being a Georgia resident has an advantage in that Georgia is one of a very few states that actually recognize diminished value claims. You also have a very good chance of getting paid for the diminished value of your vehicle if the accident was totally the fault of the other driver. You need to be pro-active and ask for diminished value. This is not something insurance companies are always going to offer up to you.

At one time, Georgia actually had a formula called rule 17c, which gave insurance companies a way to calculate inherent loss or diminished value. They have since rescinded the formula due to consumer complaints about how it was measured. Now insurance companies must use either a "measured value" (an estimate from an expert) or an "estimated value" (an estimate done on a statistical model).

It is always a good idea to hire your own expert so he or she can give you a measured value for your vehicle. In Georgia, this measured value overrides the estimated value. The only way the insurance company can really argue with this is if they pay based on their own measured value.

There are no certain answers as to how much value your car will lose due to an accident. It is estimated that for high-end luxury cars and sports cars the loss can be up to 50 percent. If the car is a clunker, it is not going to lose much value at all. Cars that are more commonly driven in more common price ranges than luxury cars, typically suffer a loss of between 10-40 percent, depending upon how much damage is done.

You need to be aggressive about asking for diminished value and ask for it right away. Do not wait until the repairs on your car are finished. The day your car was in the accident was the day that it lost inherent value. By mentioning diminished value up front, the insurance company will know you mean business and that you know the law. The mere fact that your car looks perfect when you pick it up at the body shop does not mean that your vehicle is worth what it was before the wreck.

The fact that you are educated and now understand the concept of diminished value does not guarantee that you are going to get the true inherent value of your car or that you aren't going to have to fight the insurance company tooth and nail for what you rightfully deserve. An experienced Georgia auto accident attorney can help you receive fair compensation for the diminished value of your vehicle.

If you or someone you love has been injured in a Georgia car accident, Montlick and Associates, Attorneys at Law, will work hard to help you get back on your feet and to get you the compensation you deserve. Our experienced Georgia car accident attorneys are available to assist clients throughout all of Georgia and the Southeast, including but not limited to Albany, Athens, Atlanta, Augusta, Columbus, Gainesville, Macon, Marietta, Rome, Roswell, Savannah, Smyrna, Valdosta, Warner Robins and all smaller cities and rural areas in the state. No matter where you are located, we are just a phone call away, and we will even come to you. Call us 24 hours a day/7 days a week for your Free Consultation at 1-800-LAW-NEED (1-800-529-6333). You can also visit us online at www.montlick.com and use our Free Case Evaluation Form or 24-hour Live Online Chat.