Last year we marked the 17th anniversary of the State Farm v Mabry case that gave the world of diminished value the 17c Formula with a blog post that described how the 17c Formula came to be and how it can be flawed. Well, another year has passed, so let’s take a look at where we are today with diminished value and how we calculate values.
The pendulum has swung the other way. Seventeen years ago the question was “does diminished value even exist?”. Nowadays insurance companies are trying to defend themselves against numerous claims and exorbitant dollar amounts for diminished value.
That’s a quote by DCI Solution’s Chief Valuation Strategist, Bill Geen, from last year’s post on diminished value. So what’s changed?
In short…not much. In our post last year the main point was how the pendulum has swung the other way. Well, that pendulum is still swinging today, further and further away from the middle. Not only are we seeing a tremendous increase in the number of diminished value claims but the dollar amounts continue to grow, and now many are invoking the appraisal clause.
The industry needs to take a stand on this issue before it gets too far out of hand. We do agree that diminished value exists but we firmly agree that it is based on the damage incurred to the vehicle that impacts diminished value. The pendulum needs to swing back the other way and stop in the middle.
-Bill Geen
Some carriers are starting to take a firm stand. Only time will tell if that stand sticks or if carriers will bend.
Our stand is- diminished value is all about the damage. If the specific damage to the specific vehicle is severe enough, then yes, it will suffer diminished value but not to the amounts that some of these “experts” are asking for. Our team is licensed in every state as required. Our methodology stands up in court and we stand behind our values and service.
For more information about DCI Solution and how we handle diminished value, contact us today.