Expert: webfoot - 5/30/2007

Question
Hi. I was involved in an accident, where the other driver hit the back right quarter panel of my car. The wheel (and undercarriage) suffered nearly all of the damage. I have never been involved in anything other than a fender-bender, so towing, rental cars, etc. was a new experience for me. I received an estimate from my dealer, and the repairs total to around $5,600 (parts & labor). In looking at the estimate, I cannot determine if the frame was bent. I will call them tomorrow, and if it was, should I "demand" that they total my car. But, I have heard that repairs have to be at least half of the car's value in order for it to be considered a total loss...is this true? I have a 2003 Acura MDX, 68K miles, and in good condition before last week's incident. I live in Georgia. Also, how can I determine diminished value for my vehicle? THANKS for your help!!

Answer
In Georgia, there is no strict percentage that deems a vehicle as a total loss.  As long as no more than 2 major structural sections are being replaced, ie. complete rear body and complete roof etc.  An Acura like many other vehicles, is unibody construction.  It does not have a full frame, but even if it did, frame repair or replacement alone does not deem a vehicle a total loss.
The insurance company, at their discretion, owes the actual cash value of the vehicle or the reasonable cost of repair and diminished value if applicable.

Typically, diminished value (DV) is determined using a matrix that multiplies a percentage of the vehicle's value, a mileage factor and a damage factor.  The damage factor is based on the actual structural damage to the body and the number of bolt on body parts that are replaced. Wheel, tire and mechanical component damage does not qualify for DV. The actual dollar amount of the damage is not generally considered in Georgia for determining DV though in some cases, it can be.  There is no exact answer on how you would determine DV as there are no written rules.  Many companies use the original Statefarm class action formula, but some do not.  It is still open for broad interpretation.  If you ask the insurance company for DV, they will assess the vehicle.  If you do not agree with the figure, then you will need to hire a professional appraiser and be ready to negotiate.  Do not expect an honest answer from the dealer though.  Dealers in GA are exploiting DV as a way to low ball trade offers, then turn around and sell the vehicles at full retail.  Though they can say or offer whatever they want, it is not considered in impartial appraisal.

Good luck!