Diminished Value (“DV”) is a term describing when a piece of property loses a portion of its value, as a result of damage. DV is common in automobile collision cases, but it can also be applied to other valuable property, such as jewelry or artwork.
Diminished Value Defined
In personal injury cases, the Diminished Value of a motor vehicle happens after a sudden, unexpected, and often negative occurrence. An automobile is somehow damaged and then loses its value because it cannot be repaired back to its pre-collision condition. So, for example, a vehicle might be worth $30,000 resale value, but after that particular vehicle is damaged in a collision, its resale value is now only $20,000 – despite being fixed as best as possible. This vehicle also now carries what is called a “damage history report.”
Diminished Value should not be confused with Depreciation, which is an anticipated or predicted loss in value over time.
How Does Diminished Value Affect Me? The Vehicle Owner
If the collision or other negative incident was not the automobile owner’s fault, then they will likely be able to file a “diminished value” claim again the at-fault party’s auto insurance. This type of claim allows the vehicle’s owner to recover the difference between the pre-collision value, and the value after any repairs. (If the vehicle is totaled, then a DV claim is not applicable). In Georgia, vehicle owners can also make a DV claim against their own insurance policy.
How Does Diminished Value Affect Me? The Consumer
In the Georgia Supreme Court case Mabry vs. State Farm, the Court held that as a matter of law a vehicle cannot be returned to its pre-accident value, because the majority of car shoppers will not be interested in purchasing a car that has been through an accident.
Tony Rached, owner of Appraisal Engine Incorporated, provides an example of how Diminished Value affects those interested in purchasing a car: “Customer A walks onto a dealership’s lot and sees two cars that appear to be identical, with the same price tags. He asks the salesman for a history report (AKA “Car Fax”) on both cars. The first report shows one owner, no accidents; the second report has the warning “severe damage reported.” At decision time, Customer A will not buy the second vehicle, because it was damaged and is inherently worth less money.”
As Tony further explains, “Recovering loss in value is often challenging and time consuming. This is aggravated by the fact that most people know very little about Diminished Value or how to recoup it.” Tony Rached’s company, Appraisal Engine, provides valuation reports for drivers whose vehicles have been damaged in a collision or other incident. To contact him, you can email firstname.lastname@example.org or call (678) 805-4066.
For More Information
Filing a claim for Diminished Value can be a complicated, lengthy process. The Gore Law Firm can help! If you need help with DV or a personal injury case, call us today at (404) 436 – 1529.