Diminished Value is the drop in the market value of your vehicle after it sustains considerable damage in a car accident.
After your car is repaired following an automobile accident, any vehicle history report will reveal that your car was involved in a car accident. Even if the most skilled mechanic repairs your car back to the same condition and appearance as it was prior to the accident, when most people are given the choice, they would prefer a car that was never involved in an automobile accident. Most people will want to pay less for the car that has been in the wreck because it may be considered less desirable. Therefore, the automobile accident has depreciated the value of your car.
Automobile Accidents result in Diminished Value of your Vehicle
Whenever your car is repaired by either your insurance or the at fault driver’s insurance, you are entitled to request diminished value in your claim. Since the drop in your vehicle’s value was caused by the car accident, your insurance is there to cover this damage.
The Supreme Court decision in State Farm Mutual Automobile Ins. Co. v. Mabry recognized that there is a potential for diminished value each time a car is repaired following a car wreck and requires insurers in Georgia to compensate car owners if it is determined that their car suffered a diminished value from the car wreck. However, many insurance companies will not offer you the diminished value unless you request it.
Insurance Companies Use Formulas to Determine Diminished Value After a Car Accident
Most insurance companies use their own system or formula for determining diminished value. But that doesn’t mean that formula is the only or best way to determine diminished value and you may have an argument that your diminished value is much higher than what the insurance company has calculated. Many insurance companies have set arbitrary rules on a vehicle mileage or age cut off for diminished value. But no laws or courts have set these rules and they probably shouldn’t be applied to every make and model car. For some car owners, it may be helpful to get an independent appraisal to evaluate the diminished value to your vehicle after your car accident.
There are many companies in Georgia that offer evaluations that can help you show that your car had a greater diminished value than the insurance company is quoting upon completion of the repairs from your automobile accident.0
Things to look for when choosing an appraisal company:
- Professional License
- Fixed Pricing Schedule
- Money Back Guarantee
- Possibility of Fraud
- Real Reviews from Clients
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