Compensation for Diminution of Car’s Value After a Car Accident
Posted on Friday, May 5th, 2017 at 9:51 pm
In many states, one of the most frustrating issues for car owners is that when they are involved in a car accident caused by another driver’s negligence, they may not receive enough compensation from the insurance company to account for the loss of their car’s market value. Georgia drivers can recover this loss in what is known as a diminution of value claim.
Georgia law interprets the insurance company’s responsibility to compensate someone for a loss after a car accident to include more than paying for the cost of returning the car to its pre-accident condition. Most states only recognize the loss as the property damage from the accident and do not include the lost value of the car. This kind of compensation is available in different kinds of accidents involving damaged property, and is not limited to car accidents only.
Georgia law recognizes that there is an additional loss to the car owner because the car loses its economic value in the car accident. The diminution of value is different from the repair costs of the car. It is calculated and paid out after the car has been fully repaired to the extent possible. Compensation for the diminution of value is in addition to compensation paid for the repairs.
In most cases, cars that are involved in serious accidents lose some of their value, and the owner does not discover this unless he tries to sell the car later. For example, if the car would have been worth $15,000 if sold before a serious accident, it may be only worth $10,000 after the accident. The $5,000 is the diminution in value, and in Georgia, the driver is entitled to recover this from the insurance company that paid out the claim on the accident.
Even though Georgia law allows car owner to receive this compensation as part of the insurance payout after an accident, insurance companies do not always pay car owners for the diminution of value unless a specific claim is made for it. In addition, when they do pay for the diminution of value, the insurance companies undervalue the loss, and pay out the loss at about one tenth of the diminution of value.
In some cases, recovery for diminution of value may be limited by the language of the insurance contract. The insurance policy may limit the policy holder’s ability to recover for the diminution of value. This is why it is important to read the policy and understand what it is you are paying for. If you are not sure what rights you have under your policy, you can review the agreement with an attorney.
Let Us Help You with Your Claim
Do not leave money that you are entitled to after an accident on the table when settling with the insurance company. If you were in a car accident and your car was seriously damaged, you need an experienced motor vehicle accident attorney handling your case to ensure you receive all the compensation to which you are entitled. Contact the Atlanta, Georgia law firm of Jonathan R. Brockman, P.C. today.