What is DV?
Inherent Diminished Value can best be described as ”the automatic and unavoidable loss of market value simply due to the fact that the vehicle has been involved in an accident.“ The disclosure laws in most states make it mandatory that previous damage be disclosed, made known, to a prospective buyer. Think of it this way: You wouldn’t be willing pay as much for a vehicle that was damaged as you would for one that had never been repaired would you?
Inherent Diminished Value assessments can be secured from several different sources. While Inherent DV is present in all vehicles that have been involved in a collision and subsequently repaired, and is usually the easiest to document, it is also generally only half the complete DV equation. Inherent DV, including but not limited to: the year, make and model, mileage, the overall condition of the vehicle prior to the loss, the amount of damage, the type of damage, the extent of the damage, and the damage area.
The 17c Formula
Since the class action lawsuit, entitled Mabry v. State Farm Mutual Auto. Ins. Co., No. SS-99-CV-4915, in Georgia, many insurance companies have attempted to utilize a version of an older model of a formula for calculating diminished value once used by the Infinity Group Insurance Company (1991).
The formula, while appearing reasonable at first glance, has several areas of serious concern.
Collecting your DV claim
In third-party claims, where you are the claimant, it is nearly impossible for an insurance company to deny payment for Diminished Value, although they frequently try. You are entitled to have your automobile restored to pre-loss condition and pre-loss VALUE. Since everyone knows that a vehicle that has been damaged is worth less than one that has not, the at-fault party (and subsequently their insurer through the contract of insurance that guarantees them protection) owes for the depreciation.