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Understanding Georgia’s Diminished Value Law After a Car Accident


A car accident in Georgia can come with many questions and a great deal of confusion regarding your rights to recovery. Georgia is a fault-based insurance state, meaning you will seek damage benefits from the at-fault driver’s insurance company. A settlement may pay for repairs to your vehicle, but what about when it’s time to sell your car? Who will reimburse you for the diminished value of your vehicle post-crash? Explore this widely misunderstood Georgia law to protect your right to compensation as a claimant.

Multiple sedans are parked side-by-side in a used car lot

What Does Diminished Value Mean?

If you’ve ever checked the value of your vehicle, you’ll know the survey asks if your car has ever been in an accident. Answering “yes” to this question – even if you’ve since repaired the vehicle and it looks/drives like new – will consequently drop the value of the vehicle. This is because collisions diminish the value of a vehicle, sometimes by thousands of dollars, regardless of the quality of repairs. Shoppers are less inclined to purchase a vehicle that has been in an accident.

Diminished value is a future loss all car accident survivors should consider when calculating their damages. Although it is not an out-of-pocket expense, it is money the claimant would have eventually received were it not for the accident. Thus, the at-fault driver (or his/her insurance company) should be liable to repay this loss. Unfortunately, most claimants don’t understand or have never heard of Georgia’s diminished value law. Thus, they unwittingly allow insurance companies to keep this money.

Insurance companies almost never offer to pay for the diminished value of a claimant’s vehicle unless the claimant asks. Insurers will intentionally keep this information to themselves if the claimant doesn’t bring it up. Insurance companies have kept millions of dollars from claimants over the years by failing to disclose the diminished value law. Almost no driver bothers to mention it during a claim, often because they don’t know about it or don’t know how to ask. Yet it’s up to you as a claimant to know about this law and act on it.

How to Use the Law to Your Advantage

Never keep silent about the diminished value of your vehicle during the insurance claims process. Ask your insurance company about diminished value damages at the beginning of the claims process. Georgia law gives you the right to claim the amount of money you will lose due to the depreciation of the value of your vehicle if and when you decide to sell. Calculate this amount by examining the value of your vehicle before and after the crash (with help from a mechanic if necessary), then finding the difference between the two.

Low-quality repairs to your vehicle may further diminish its value. You could qualify for even greater compensation if someone poorly or incorrectly repairs your vehicle following a collision. Once you’ve calculated the diminished value of your vehicle and your related future losses, take this sum to the at-fault party’s insurance company. List it as part of the damages you seek in your claim. Then, wait for the insurance company to review your request and decide to deny or accept the amount you ask.

Not all vehicles qualify for diminished value recovery in Georgia. Only vehicles with substantial market value (over $7,000), greater than $500 in property damage, low-to-normal mileage, a clean title, and those that are less than 10 years old may qualify for this type of compensation. You will only qualify if you file your claim within the statutes of limitations. If you do qualify, the insurance company must pay the diminished value of your vehicle by law. Failure to do so may be grounds for an insurance bad faith claim. If you have questions about your claim, contact an Atlanta car accident lawyer for a free consultation.


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