Personal Injury Lawyer Atlanta, Georgia
Se Habla Español

The Secret Insurance Companies Don’t Want You to Know About Diminished Value

We want to expose one of the best-kept secrets in the insurance industry. The insurance companies are saving literally hundreds of millions of dollars each year right here in Georgia because of this secret.

This money should be paid to Georgia's consumers. But like most things, if the person doesn't know they are entitled to receive this money, the insurance company is not going to knock on their door and voluntarily hand it to them.

What's the secret?

It's called a "diminished value claim." Let's explain what that means.

If you are involved in a car wreck, your car will suffer property damage. When you get your car repaired, you know it will be worth less than it was before the wreck.

Think of it this way. You walk into a used car lot and see two identical cars parked side by side. One has never been wrecked, and one has been wrecked and repaired. Most people would never buy the car that had been repaired. You don't want to buy someone else's problem. And if you would even consider buying the car that had been wrecked, you would want a substantial discount.

Diminished value is what the market says your vehicle lost in value because of the repairs.

How do you calculate the amount of diminished value? The best way to do it is by hiring an appraiser to do a market survey for your car.

And this is where the insurance companies are misleading consumers. A lot of insurance companies use a ridiculous formula the industry created to calculate diminished value. They make it sound like it is a fair and reasonable method but it is not.

Let me give you an example of how the insurance companies are not being fair:

One insurance company sent one of our clients a check for $496 using their formula. We hired an independent appraiser. Their market survey showed the vehicle actually lost $2,235 in diminished value. The insurance company was trying to cheat our client out of over $1,700!

This isn't right. And the insurance companies get away with this every day here in Georgia. It's time we stop them.

It does not matter who is at fault in the wreck for you to be able to pursue a diminished value claim.

If you are at fault in causing the wreck, you can still pursue a diminished value claim against your insurance company. If someone else causes the wreck, you can pursue the claim against their company. Either way, if your car is wrecked and repaired, you have a diminished value claim and should pursue it.

What is the proper method for calculating diminished value?

Both the first party and third party statutes are silent on this issue, but there is guidance for us in the case law.

According to Canal Insurance Company vs. Tullis (1999), where damage to a vehicle is not a total loss, a party seeking to recover for damage to the vehicle has two options in proving the amount of damage. These choices of proof are:

  1. The difference between the fair market value of the vehicle before and after the collision; and
  2. The reasonable costs of repair, together with hire on the vehicle while rendered incapable of use and the value of any additional permanent impairment, provided that the aggregate of such amounts does not exceed the fair market value before the collision.

Contact Gary Martin Hays & Associates if you're unsure about a diminished claim evaluation.

We've handled many diminished value claims. Attorney Hays even taught other lawyers throughout Georgia about the process.

If you have questions about your wreck or a potential diminished value claim, give our firm a call at (770) 934-8000. You have nothing to lose if you call but think of what you could lose if you don't.

FURTHER READING:

What Are the Odds of Getting Into a Car Accident?

The Biggest Mistake People Make After a Car Accident

Categories: Car Accident Posts
Civil Justice
Avvo Rating 10.0 Superb
Nation's Premiere 2023
Martindale-Hubbell Client Champion Gold 2024
National Association of Distinguished Counsel
Expertise Best Workers Compensation Lawyers in Atlanta 2024
Expertise Best Wrongful Death Attorneys in Atlanta 2024
Expertise Best Car Accident Lawyers in Norcross 2022
Expertise Best Workers Compensation Lawyers in John's Creek 2022
Expertise Best Car Accident Lawyers in Conyers 2021
Expertise Best Car Accident Lawyers 2019
America's Top 100 Personal Injury Attorneys
Top 100 Trial Lawyers
Million Dollar Advocates Forum
MultiMillion Dollar Advocates Forum
Top 25 Motor Vehicle Trial Lawyers
Top 25 Brain Injury Trial Lawyers
Top 10 Trucking Trial Lawyers
Top 10 Nursing Home Trial Lawyers
Super Lawyers
Voted Best of Gwinnett 2020
Georgia Trial Lawyers Association
Avvo Clients' Choice
Avvo Clients Choice
10 Best Attorney 2023
Keenan Trial Institute
Better Business Bureau listing
Telly Awards