Skip to content

The rule of diminished value or total loss in Georgia

May 24, 2021
Shamis & Gentile, P.A.
totaled car

Total loss insurance claims in Georgia follow a particular rule as laid out in state law. The rule of diminished value is applicable in the Peach State, meaning that insured vehicle owners can file a diminished value claim to recoup lost value on a vehicle after an accident. This rule is the result of a 2012 Georgia Supreme Court ruling. 

How does the Georgia Supreme Court decision for diminished value affect my property?

In 2012, the Georgia Supreme Court ruled that an insured person must be compensated both for the cost of repair of a damaged vehicle and the diminution in value of the car due to an accident. This rule, unique to Georgia, applies to all kinds of property, not just cars. 

In the event of a total loss, the insurer must provide for the adjustment and settlement of the claim on the basis of actual cash value or replacement. The insurer may elect to use either settlement method, provided that the principle of diminished value is taken into account. 

What is the Cash equivalent method?

When the insurer pays out a claim in cash, an equivalent settlement can be made based upon the actual cost less any deductible provided in the policy, to purchase a comparable automobile by the same manufacturer, same model year, with similar body style, similar options, and mileage, including all applicable taxes, license fees, and other fees incident to the transfer of ownership of a comparable automobile. 

What is the Replacement vehicle method?

The insurer may replace the insured vehicle, including all applicable taxes, license fees, and other fees necessary to transfer ownership. The vehicle must be comparable to the damaged one in that it is the same manufacturer model, same or newer model year, similar body style, similar options and mileage as the insured vehicle, and in good overall condition. The replacement vehicle must be made available for inspection by the insured within a 50-mile radius of his/ her place of residence. A replacement vehicle meeting all the criteria mentioned above must be available for sale through a licensed dealer. If one cannot be found, then the claim should be paid in cash.

How to take legal recourse using Georgia-based lawyers

In the event that your Georgia car insurance claim is not dealt with according to the state’s diminished value rule, with one of the two replacement options, you may need to take legal action to get what is due to you. Contact Shamis & Gentile and speak to one of our Georgia-based insurance claim lawyers. They will be able to assess your information and determine whether you have a case against your insurance company. Be mindful of Georgia’s total loss rule and demand that your insurer pays you out or replaces your car accordingly. 

In many total loss cases, insurers cover the cost of the replacement vehicle but neglect to pay for sales tax and other fees, leaving the customer to deal with these expenses. If you have experienced this with any auto insurance policy during the past five years, you may qualify to join a total loss class-action suit in Georgia. Get a lawyer on your side. Contact Shamis and Gentile to book a free consultation today.


Submit a Class Action Claim

Submit a class action claim today; there are no associated fees or expenses unless we manage to win the case on your behalf.