After being involved in a car accident where the vehicle has been wrecked and repaired, it’s necessary to calculate the Diminished Value. The diminished value is the loss in market value that occurs when a vehicle has been involved in an accident.
Once a car is involved in an accident and has been repaired, a reasonable consumer will not pay the same price for that vehicle, as they would for a vehicle with no accident.
You may not realize it, but insurance companies are intentionally keeping quiet on extra money you are entitled to receive under Georgia’s diminished value law. This can add up to thousands of dollars in some cases!
At Hinton & Powell, Georgia’s car accident law firm, we can help. We’ve helped many of those in Buckhead, Atlanta, Sandy Springs, and Marietta get the compensation they deserve following an accident. Read on to learn how to calculate your vehicle’s diminished value following an accident, then contact Hinton & Powell to ensure you are recovering what you deserve from your insurance company.
Most insurance companies use a calculation known as 17c to arrive at a value for your car that has been involved in an accident. This formula was first used in a Georgia claims case involving State Farm. Here is how formula 17c works.
The first step is to determine the sales value of your car. This is what Kelley Blue Book determines is your vehicle’s worth. This is a good starting point and will give you an estimate based on the make and model of your car, its mileage, and the extent of the damage. You can visit Kelley Blue Book to use the calculation tool to get a good estimate of what your vehicle is worth.
The 17c formula takes the retail value of the car from step one and multiplies it by .10 to produce the “base loss of value.” Unfortunately, there really is no justification for this gap and it is usually in the insurance company’s best interest to use it.
During this step, you’ll adjust the amount from step 2 to account for any structural damage to your car. This will depend on whether parts have to be replaced or repaired in the vehicle as the insurance company only covers what can’t be fixed with a new part. To apply a damage multiplier, take the number from step two and multiply it by the following number that best describes the damage to your car:
Next, the insurance company will deduct more value for the mileage of your car. Multiply the number from step 3 to arrive at the final diminished value of your car:
During this step, the insurance company basically double dips, because in the first step, we already accounted for the vehicle’s mileage. The mileage multiplier discounts the diminished value claim based on mileage. Plus, if you have over 100,000 miles, your claim will basically be reduced to zero.
If you’re in the process of settling your diminished value or total loss claims, have the reputable and experienced lawyers of Hinton and Powell by your side. Our team will help you get the most compensation you deserve following a crash.
Remember, insurance companies are typically required to reimburse for the reduction in value after repairs. This loss in value is owed in CASH to you, after the repairs are completed.
Don’t leave it to chance when it comes to recovering compensation for your car’s diminished value. Contact Hinton & Powell to help with your diminished value claim today.