When a vehicle has been involved in a significant accident, it will not be worth the same amount as a similarly equipped and maintained car that has not been damaged. This difference in value is called diminished value claims and can be recovered through a diminished value claim. However, determining whether you have a valid diminished value claim and how much you should be paid can be complicated.
In the past, courts ruled on this issue in different ways. Some courts used expert testimony and others applied a formula to determine the value of a vehicle after a crash. In 2001, the Georgia Supreme Court in State Farm Mut. Auto. Ins. Co. v. Mabry, 556 S.E.2d 114, attempted to settle the matter by applying what has become known as the 17c formula. This is the standard that insurers now use to calculate diminished value.
The first step in a diminished value claim is to determine the current market value of your vehicle from a trusted source such as Kelley Blue Book or NADA. Then, the insurance company will apply a cap to this figure, which is typically around 10%. Then, the company will adjust this figure by multiplying it by a damage multiplier. This multiplier varies by insurer, from a low of 0.00 to a high of 1.00, and it assesses the severity of the collision.
Next, the company will subtract your repair costs from the adjusted figure to arrive at a compensation amount for your diminished value. This is the amount that the insurance company will pay to you when you make a successful diminished value claim. Typically, the insurance company will offer you this amount after they review all of the evidence and documentation that you have submitted.
Before you accept any diminished value settlement, it is essential to have the documentation reviewed by a qualified attorney to ensure that your damages are fair. An attorney can also help you negotiate with the insurer and encourage them to offer more money if they are not offering you what you believe is a reasonable amount.
If you are not satisfied with the insurance company’s diminished value settlement, it may be worthwhile to file a lawsuit to recover additional compensation. However, this is a big decision that should be carefully evaluated to make sure it makes financial sense. The experienced car accident lawyers at Cooper Hurley can advise you about your options.
If you or a loved one has been involved in a serious accident in Virginia, contact our law firm to see how we can help. We handle all types of crashes involving cars, trucks, motorcycles and buses. We have over 100 years of collective experience and a strong track record of success. We are available 24/7 to answer your questions and assist you in taking the next steps. Contact us online or call at 866-455-8062 to set up your free consultation today. We handle cases throughout the state of Virginia, including the cities of Alexandria, Fairfax and Richmond.