What the Heck Is Diminished Value? And Why Do I Care?

Recovering the Loss of Value in Your Vehicle Value After an Accident
“Diminished Value” is often unknown to the typical Georgia driver and, when known, is most likely a misunderstood insurance policy provision. When any motor vehicle has been in an accident, its value depreciates ~ crashes (kinda like the vehicle did).  Back in the old days, before Carfax, it was a difficult for the average used car buyer to know if a vehicle had been in an accident.

Defining Diminished Value
Diminished Value (“DV”) is the reduction in a vehicle’s fair market value after a vehicle has been damaged in an accident, even if repaired to the highest standards available today.   In Georgia, the Supreme Court ruled that insurance companies are required to pay Diminished Value claims in a 2001 case.  (See State Farm Mutual Automobile Insurance Co. v. Mabry, 274 Ga. 498, 556 S.E.2d 114 (Ga. 2001)). 

 

Although it is technically not possible, assume for a moment that your vehicle was repaired to “new” condition by the body shop, the reality is that your vehicle has only been repaired to “like-new” condition. It simply is less desirable to a prospective buyer. Therefore, your newly repaired, shiny vehicle simply has a lower selling price.  Like a stock market crash, your vehicle lost value due to the accident.

Diminished Value claims are substantiated on the concept that damaged vehicles are worth far less after being involved in an accident, even after receiving the best repairs possible.  Prospective buyers are reluctant to will buy a damaged and repaired vehicle because of the unknowns.  Like cowboys in the Wild West days they do not want to buy a lame horse. Most damaged vehicles only sell at a substantial discount.  Diminished Value is a simple concept that judges and juries are generally quick to understand: “What was the Plaintiff’s car worth before the accident and what is the value of the Plaintiff’s car today.”

When a vehicle sustains significant damage, the cost to repair the vehicle is substantially higher and the loss of value is even greater. Therefore, do not sign a property damage release until you have received your diminished value payment and all other property damage claims.

At The Danda Law Firm we handle Diminished Value cases by:

  • Evaluating the damages to your car and obtaining a copy of the repair bill,
  • Securing a Diminished Value estimate from a reputable vehicle appraiser,
  • Filing a Diminished Value claim with the insurance company for the at-fault driver,
  • When necessary, filing a lawsuit to collect Diminished Value on your behalf.

Proving Diminished Value
Luckily, O.C.G.A. § 24-7-701, et. seq., the vehicle owner is not required to be a dealer or an expert to testify as to the value of his or her vehicle.  An owner can testify as to the value of property but must have sufficient basis to do so.   Monroe v. Hyundai Motor America, Inc., 270 Ga.App. 477, 606 S.E.2d 894 (2004).
§ 24-7-701:  Lay witness opinion testimony:
 (a) If the witness is not testifying as an expert, the witness's testimony in the form of opinions or inferences shall be limited to those opinions or inferences which are:
(1)    Rationally based on the perception of the witness;
(2)    Helpful to a clear understanding of the witness's testimony or the determination of a fact in issue; and
(3)    Not based on scientific, technical, or other specialized knowledge within the scope of Code Section 24-7-702.
(b) Direct testimony as to market value is in the nature of opinion evidence. A witness need not be an expert or dealer in an article or property to testify as to its value if he or she has had an opportunity to form a reasoned opinion.

HISTORY: Code 1981, § 24-7-701, enacted by Ga. L. 2011, p. 99, § 2/HB 24.
§ 24-7-704.  Ultimate issue opinion
(a)    Except as provided in subsection (b) of this Code section, testimony in the form of an opinion or inference otherwise admissible shall not be objectionable because it embraces an ultimate issue to be decided by the trier of fact.
(b)    No expert witness testifying with respect to the mental state or condition of an accused in a criminal proceeding shall state an opinion or inference as to whether the accused did or did not have the mental state or condition constituting an element of the crime charged or of a defense thereto. Such ultimate issues are matters for the trier of fact alone.

HISTORY: Code 1981, § 24-7-704, enacted by Ga. L. 2011, p. 99, § 2/HB 24. The way he
However, the best way to determine the Diminished Value of a vehicle is to hire a reputable independent appraiser to professionally assess the Diminished Value of the vehicle.

Certainly you are entitled to give a Diminished Value Claim the ole’ “college try.”  If you and the adjuster cannot agree to a fair and just amount, a lawyer can help especially if insurance company is acting in what is known as “bad faith”.  A Judge can Order the insurance company to pay a penalty of 50% of the liability (cost of the repairs) to the vehicle for the loss of value or $5,000.00, whichever is greater if the insurance company is intentionally not paying a valid claim.