One component of your car accident settlement may be the diminished value of your vehicle, which tries to account for the losses in value of your vehicle as a result of the accident. However, it is not always easy to navigate this process, and you need to learn how to calculate diminished value in Georgia based on numerous factors. If you are trying to file a car accident claim for your losses, we encourage you to speak to our Duluth car accident lawyer about this part of a much larger process.
What Is Diminished Value?
Prior to the accident, your car had a value based on what you could obtain for the car if you sold it on the open market (this has nothing to do with how much you owe on a loan). After the accident, you have to report that accident if you were to sell the car, meaning there is now a difference in value. Diminished value is the term we use to describe the difference between the car’s pre-accident value and post-accident value.
The car insurance company may be willing to pay you for that diminished value – the difference between these two vehicles – as it is a loss you have suffered as a direct result of the car accident. Even if your car was not brand new and in pristine condition before the accident, the damage from a moderate to severe accident can be significant, leaving you with a car that may no longer be worth what you expect. No one is going to pay the same for a car they buy that has been in an accident as they would for one that has not, for example.
You likely have no intention of selling your car, so why does this matter? In short, your car has suffered damage as a result of this accident, and even when all of that damage is repaired, your car is still going to be worth less now than before the accident. This is one type of loss you have suffered due to the negligence of the other driver, and you should be compensated for it.
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Types of Diminished Value Explained
The next factor to consider is the type of diminished value your car has suffered as a result of the accident. There are several types of diminished value that could play a role in how you calculate what is owed to you in a personal injury claim in Georgia. Ultimately, we need to use this information to help us to structure a claim for the insurance company.
Consider your vehicle before the accident and now. How has the value changed, and what will happen once the repairs take place? Understanding this is the first step in determining what you are owed for the losses you have incurred.
The following are some of the ways your vehicle has likely lost value as a direct result of the car accident. Keep in mind that our car accident attorneys in Georgia will help you navigate the evidence required to seek out diminished value in all of these instances. Common types of diminished value:
Immediate Diminished Value
The immediate diminished value is the difference that occurs immediately after an accident occurs. This is the value of the car at that point after the accident, before any repairs are made to it. Typically, this claim is made in a court of law during a lawsuit and is not used in filing an insurance claim directly.
Inherent Diminished Value
Inherent diminished value represents the loss of your car’s market value even after the necessary repairs are made to bring it back to the condition it was in prior to the accident. To calculate this value, we look at the value of the car prior to the accident and the value of it now after the accident. Often, when speaking of diminished value, this is the form that is focused on.
Repair-Related Diminished Value
A third factor that may play a role in your ability to claim compensation is repair-related diminished value, in which case the car is never going to be able to be restored to the condition or value it was once worth. If the vehicle has a custom paint job, for example before the accident, and cannot be done the same way for any reason, then there is a loss of value in the car that must be considered. We may need to pursue financial compensation for this type of loss if it applies as well.
The Georgia Supreme Formula for Calculating Diminished Value
As expected, this type of calculation can be hard to determine even with minor types of loss, which is why the Georgia Supreme Court created a formula for calculating it. The form, called 17c, is used by adjusters to determine the amount of compensation you should get. Often, it is not accurate or fair.
This formula is one component of a bigger picture. We often work with our clients to ensure that if this formula is used – or any formula is used – that it accurately represents your unique situation. The following is the step-by-step process used by adjusters:
- Determine the car’s value using a resource like the National Automobile Dealers Association based on the car’s condition, age, and other factors.
- Add a 10% cap to the car’s value (multiply the value by .10 to determine the base loss of value)
- Apply a damage multiplier, which is a figure based on the amount of structural damage
- Apply a mileage multiplier based on the miles your engine has to determine the impact of the accident
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Ready for Some Help in Determining Your Accident Loss Claim?
Now that you know how to calculate diminished value in Georgia, your next step is to reach out to our car accident attorneys at Barrios Virgüez for help in determining this value and all other losses you have. Expect us to work to ensure your losses are accurate and account for any loss of value of your car. Set up a free consultation now to discuss your case with our legal team.