After being involved in a car accident and suffering personal injuries and physical property or vehicle damages, it is very imperative that you calculate the diminished value. Many people probably don’t know that the diminished value refers to the loss in market value and typically occurs after your vehicle gets damaged in an accident.
No matter if your vehicle is repaired after being involved in an auto accident, a reasonable customer will never pay the same price for your vehicle as he would for a no accident vehicle. Many insurance companies try to stay quiet on the extra money that the accident victim is liable to receive under Georgia’s diminished value law.
Vehicles and property in Georgia are subject to the diminished value rule. Because the property loses value after being affected in an accident, reselling your vehicle or house will be difficult. To prevent these losses, one can file a diminished value law suite. Georgia law requires you to file a diminished value lawsuit for the insurance agent to recoup lost value as a result of a car accident in Athens, GA.
Fortunately, you can reach out to a car accident lawyer in Atlanta and seek their valuable suggestions and advice in this regard. Having a professional by your side will eventually help you understand all the necessary steps to calculate the diminished value and receive the compensation you deserve.
Necessary Steps to Calculate the Diminished Value
A lot of insurance companies use a 17c calculation technique to determine the diminished value for your car. This formula was first used in Georgia’s state farm claim case. So, here’s how the 17c calculation works.
Step 1 – Evaluate the Value of Your Car
Before calculating the diminished value of your car, you must determine the sales value of your vehicle. Calculating your car’s sales value is a good starting point because it will eventually give you an estimated quote based on the model and make-year of your vehicle, its mileage, and the level or degree of damage. Moreover, you can also consult the Kelly Blue Book and use the calculation tool to receive a quick estimate of your vehicle’s worth.
Step 2 – Calculate the Base Loss of Value
You need to understand that the 17c formula primarily takes the retail value of your car and applies a cap of 10% to it (i.e., multiplies the value by .10) to produce the base loss of value. Unluckily, there is no proper justification for this base loss value gap, and it is mainly in the insurance company’s best interests to use it.
Step 3 – Applying the Damage Multiplier
In this step, your personal injury lawyer in Atlanta will help adjust the amount from step 2, alongside documenting all structural damage to your vehicle. It will depend on the overall vehicle damages and the parts that need to be repaired or replaced in the vehicle. To apply a damage multiplier, all you need to do is to take the amount from step 2 and multiply it by the following number as per the damages caused to your car.
- 1 – in case of severe structural damage
- 0.75 – if major damage has been caused to your vehicle’s panels and structure.
- 0.50 – in case moderate damage has been caused to your car’s panels and structure.
- 0.25 – if minor damage has been caused to your car’s structure.
Step 4 – Your Car’s Mileage
In addition to all these calculations for the diminished value, your insurance company will also make certain deductions for your vehicle’s mileage. The amount from the Step 3 will be multiplied by the following numbers to find out the final diminished value of your car.
- Multiply by 1 – for 0 to 19,999 miles.
- Multiply by 0.80 – for 20,000 to 39,999 miles.
- Multiply by 0.60 – for 40,000 to 59,999 miles
- Multiply by 0.40 – for 60,000 to 79,999 miles
- Multiply by 0.20 – for 80,000 to 99,999 miles
You need to know that it is during this step that the insurance company double dips and discounts the diminished value of your car based on its mileage.
Why Is Filing a Diminished Value Lawsuit Important?
A diminished value lawsuit will help you reclaim the loss of value of your vehicle in a crash. When you get involved in an accident, that wasn’t your fault, and your vehicle gets damaged. Then the reduced worth of the vehicle will usually be obtained by the at-fault party’s insurance and can be asserted.
Understanding how insurers’ measure lost benefits will assist you in negotiating the best possible settlement. Hence, besides hiring a personal injury lawyer in Marietta, you should also file a diminished value lawsuit.
What Does It Mean That Something Has Lost Its Value?
The disparity in the market price for a car before and after an accident is known as diminished value or diminution of value. And a vehicle that has been repaired to a certain standard using the initial manufacturer’s components would be worth less than before the crash. Depreciation refers to a decrease in value over time, while diminished value refers to a drop in value.
A Quick Example
Assume you’re selling a used car for $20,000 that was recently involved in a crash. A customer is interested in buying the vehicle until they hear that it was involved in a crash, to which point the buyer reduces their bid to $16,000.
Your car’s worth is depreciated by $4,000 in this case. To put this in another way, we can say that the car is worth $4,000 less now than it was before it had met with an accident.
What Is the Formula for Calculating Diminished Value?
In the United States, most auto insurance providers use the 17c calculation to measure diminished value. The definition was first developed in a Georgia court case, which eventually popularized the term. If there isn’t a universally available diminished value calculator, insurers commonly use the 17c formula or a tweaked variant of it.
The measures to calculating your vehicle’s diminished value calculation are as follows:
Check the market value of your vehicle
To get an estimate of your vehicle’s worth, go to the National Automobile Dealers Association’s (NADA) official website. The website helps you to enter precise details about your car to get the correct value. Several options and specifications that affect the valuation of your car are mentioned below.
- Wheel type
Step two is to figure out how much money you’ve lost in the first place
To the sales value determined by NADA, insurance firms usually add a 10% limit, also known as the base loss of value. This basically means that the maximum sum is 10% of the NADA valuation for reduced merit statements.
Apply a damage multiplier in the third step
Insurance agencies use a damage multiplier to adjust the base loss of value. It means that the above limit is compounded by a number varying from 0.00 to 1.00. Based on the insurer’s assessment of loss, an adjusted amount for diminishing value is calculated.
For cars with no structural damage or replaced doors, the multiplier starts at 0.00 and can go as far as 1.00 for cars with serious structural damage.
- Severe structural damage: 1.00
- Major damage to panels and structure: 0.75
- Moderate damage to panels and structure: 0.50
- Minor damage to panels and structure: 0.25
- No structural damage or replaced panels: 0.00
Step four is to apply a mileage multiplier
The mileage multiplier works in the same way as the damage multiplier. Based on how many miles the engine has on the odometer, the mileage multiplier eliminates the —now adjusted—base loss of value. The worth of an older vehicle is usually smaller than that of a newer car.
The diminished value is calculated by multiplying the changed base loss of value from stage three by the required mileage multiplier.
- 0-19,999 miles: 1.00
- 20,000-39,999 miles: 0.80
- 40,000-59,999 miles: 0.60
- 60,000-79,999 miles: 0.40
- 80,000-99,999 miles: 0.20
- 100,000 miles or more: 0.00
How to File a Lawsuit for Diminished Value?
When you’re in a car crash, and the other person is at fault, you can make a reduced value lawsuit to get the value of your car back. Most insurance plans exclude you from making a lawsuit for lost benefit against your own insurer.
Seek a diminished value claim as soon as possible, preferably within days of the accident, since property claims are subject to state statutes of limitations. Although the statute of limitations is normally calculated in years, still providing the supporting documents for the lawsuit as soon as possible after the accident is better.
Consider that you’ll need to have an estimated market valuation for your vehicle during the claims process and that the value will depreciate over time.
Find the Right Attorney for Your Diminished Value Claims
So, suppose you’re looking forward to setting your total loss claims or the diminished value of your vehicle. In that case, you must consult a car accident attorney in Atlanta and seek their professional help to receive the maximum compensation that you deserve.
We all understand that a damaged car can cause anxiety and headaches for the vehicle’s owner. However, personal injuries can be far fatal in certain scenarios. So, it’s recommended that you opt for a personal injury doctor and lawyer in Athens, GA, if you experience any personal injury during an accident. Call The Hurt 911 Injury Centers at 1-800-487-8911.
Ensure that you do not leave any chance when it comes to acquiring compensation for your vehicle’s diminished value. For more information, you can contact The Hurt 911 Injury Centers at 18004878911 and speak with our professional team of attorneys to determine your diminished value claims.