Diminished Value of Georgia Was Featured in a WSB-TV Segment Investigating Loss in Value Insurance Claims
Atlanta, Georgia (PRWEB) June 30, 2013 -- According to the Georgia Department of Transportation, more than 1,700 cars crash in Georgia each day; reported WSBTV in a news segment that aired as a part of their prime time special discussing Diminished Value claims. Their consumer investigation unit had revealed the systematic and unfair handling of loss in value insurance claims in Georgia.
Loss in value, otherwise known as Diminished Value, is the reduction in resale value a vehicle suffers after being repaired from an accident or collision. Auto buyers will not pay the same amount for wrecked and repaired vehicle as they would for an undamaged counterpart.
After a 1999 Georgia court decision called Mabry vs. State Farm (Georgia Supreme Court FILE NO. SU 99 CV 4915, 12/01/00), insurance companies are required to pay for a crashed car's lost trade-in value. The formula the court used in that case assigned an arbitrary loss in value percentage that doesn't reflect the true diminished value a vehicle suffered, this formula is widely used by insurance carriers today. This formula is called 17c.
What is 17c?
The 17c formula, named after paragraph 17 of the Mabry v State Farm court case caps the loss in value a vehicle suffers at 10% of the vehicle's NADA book value. "Not only is 10% arbitrary and too low, it could not logically apply to all makes and models," says Antoine Rached, Owner of Diminished Value of Georgia. "It is irrational to maintain that a Mercedes will lose the same percentage as a Kia for a given accident. The formula doesn't stop here, after the initial 10%, the formula deducts for random damage modifiers and unreasonable mileage restrictions."
In 2008, Georgia Insurance Commissioner, John Oxendine issued a directive stating that: "The Department has never promulgated or produced by regulation any formula for use in the determination of diminution of value as it relates to physical damage claims nor has the Department endorsed any specific formula or method.", it also gave insurers instructions to :" take into consideration all relevant information in the evaluation of diminished value claims including, but not limited to, relevant information provided by an insured regarding diminution of value."
"Most of the claims I get, people are getting offered $200 to $300 where diminished value should have been $2,000 to $3,000," said Rached. "So it is tenfold, or they are paying 10 cents on the dollar."
Since the maximum diminished value payment according to 17c is 10 percent of a vehicle's book value. A $10,000 car could lose no more than $1,000 and if the car has more than 100,000 miles the owners don't get a check at all.
Vivian Joyce wound up with $1.74 after a rear-end crash in her minivan.
"Who is going to buy a car and say, 'Stop. I'm going to pay you a dollar less because of this wreck!' Nobody does that," Rached said. He figured her loss at $550.
"Knowing what I'm entitled to, of course I want to get that money back," Joyce said.
After submitting Mr. Rached's appraisal to State Farm, she received a check for the entire loss in value her vehicle suffered, an huge increase in payout.
About Diminished Value of Georgia:
DVGA is a locally owned auto appraisal company offering a multitude of vehicle valuation services. The company was started in 2007 by Antoine Rached and currently processes about 500 Diminished Value appraisals per month.
For more information about auto appraisal claims on Atlanta, please contact Diminished Value of Georgia at 678-404-0455 or visit: http://diminishedvalueofgeorgia.com
Antoine Rached, Diminished Value of Georgia, http://diminishedvalueofgeorgia.com/, 678-404-0455, [email protected]
Share this article