Georgia auto property damage diminution of value claims

Posted on September 18, 2008 by Ken Shigley

Georgia automobile insurance companies have been required since 2001 to "include an evaluation of diminution in value in its standard assessment of damages, just as it evaluates other elements of damage, and to adopt a suitable methodology for doing so." State Farm Mut. Auto. Ins. Co. v. Mabry,  274 Ga. 498, 556 S.E.2d 114 (2001).

In the past year or so a number of insurers have represented to claimants that they were using a formula approved by the Insurance Commission that set a definitive amount for valuation of diminution of value.  That was incorrect. 

Today the Insurance Commissioner is issuing a directive to insurance companies to "cease using any language which implies the Department has endorsed a particualr formula or method to determine diminution of value."

Instead, the Commissioner is informing insurance companies:

Effective immediately, any insurer disseminating information and/or appraisals to their insureds shall cease using any language which implies the Department has endorsed a particular formula or method to determine diminution of value. Specifically, any insurer disseminating information and/or appraisals to their insureds shall cease using any language which implies that the Mabry decision or any other requirement of the Department supports the proposition that the diminished value result obtained by a carrier’s use of a particular formula or method constitutes the definitive determination of the carrier’s liability to its insured. Any insurer not complying with this Directive will be subject to appropriate disciplinary action.

  • http://www.blog.dowlenlaw.com Zale Dowlen

    Really! Good article.
    I’ve used the formula before, when I was an insurance adjuster. The nice thing is that GA even has a statute. If I ever make it to the TN Legislature, I will propose that same statute in TN.
    Did the Insurance Commissioner propose a formula?

  • http://www.SafeCollisionRepairs.com Diminished Value Expert

    My hat is off to Georgia’s Insurance Commissioner. Like Georgia, West Virginia has a diminished value law on the books. Time after time insurers in this state have tried to push the 17c formula for calculating diminished value claims “because it has been approved” – the idea being if it is good enough for the courts in GA it should be easy to defend if need be in WV. It has been my experience that consumers leave a lot of money on the table when they accept an insurance settlement based on 17c.

  • Cricket

    They will if they don’t know any better.

  • Woody Owens

    How do I access this on their web site to print a copy? It seems to get more user unfriendly every time it is updated.

  • Edward

    Zale – I am an atty. in Alabama with a diminished value issue. The adjustor is utilizing a “Georgia Diminished Value Calculator” to make an offer to my client. Interestingly, he tells me this is approved by the Ga. Sup. Ct., and has no clue how the various “modifiers” in the calculator are determined. He even sent me the calculator to play with. Can you contact me about this?

  • http://www.collisionclaims.com Richard Hixenbaugh

    I am an independent auto appraiser that specializes in diminished value appraisals. I can tell you that the 17C formula is NEVER correct. It has no basis in reality, logic or law. Ths formula was simply utilized as a settlement tool in a class action law suit. I have personally testified in over 30 cases in the state of Georgia and in not 1 of those cases what the 17c formula upheld. If fact in one case the judge just shook his head and said that this formuls just defies logic. So if the formula is not valid or applicable in the state where is came from it certainly is not applicable in any other state.
    I would welcome calls or emails from any attornies interested in pursuing diminished value claims. My company has over 1200 vehicle inspectors through out the country to inspect vehicles.
    Too many attornies are leaving way too much money on the table. Your clients do not even know they are entitled to this. The avaerage diminished value claim is about $3k on a $5K to 7K repair. More repairs = more diminished value. If you inform your clients that you are going to collect additional money they did not know they were even entitled to why would they care that you are going to be paid 33% or even 40%.
    Call me…lets talk