What is Diminished Value?
If the insurance company decides that they are going to repair your car, you may be entitled to diminished value for your automobile. Diminished value simply means that the value of your car was diminished as a result of being in an accident.
A 2001 case from the Supreme Court of Georgia (State Farm Mutual Automobile Insurance Company vs. Mabry et al., 274 Ga. 498, 556 S.E.2.d 114), ruled that insurance companies who are responsible to pay property damage on a vehicle as a result of an accident are also responsible to pay for diminished value.
A formula is used by the insurance company to determine the amount of diminished value that they are required to pay.
How do I know the offer the insurance company made for the diminished value of my car is fair?
If the insurance company is offering diminished value for your vehicle, the insurance company has done a calculation of what they believe your diminished value claim is worth. The factors that go into determining diminished value include the make and model of your vehicle, the amount of property damage, and the number of miles on your vehicle.
For the purpose of this blog, I cannot go into the specifics of how much your diminished value claim is worth. But, if you have received a diminished value check, and have any questions about how it was calculated, I would advise that you call the adjuster who sent you the check, and ask how he or she calculated it. You may want to make sure that the information he or she used to calculate the check is correct. I advise you not to cash the check until you understand how it was calculated.
Should I cash the check the insurance company sent for the diminished value of my car?
The insurance company has done a calculation of what they believe your diminished value claim is worth. If you have questions about how that was calculated, call the adjuster who issued the check, and ask how it was calculated.
Once you cash the check, it is considered an acceptance of the offer made, and your diminished value claim is resolved. There will not be much that you can do about it once you have cashed the check.
Disclaimer: It is important to note that this is general information, and should not be considered “legal advice.” I have been handling personal injury cases for many years, and can offer general answers to common questions, but please do not construe anything on this website to be legal advice about YOUR CASE. Each case is different! An attorney can only give legal advice when he or she understands the facts involved in your case.