Reports by Consumers

This consumer reports that in spite of the initial court ruling, diminished value payments are unlikely.

In November 2001 the Georgia Supreme Court ruled in favor of two State Farm customers who asserted that wrecked cars are worth less simply because they have been wrecked — no matter how expertly they're repaired — and that insurers are liable to pay the difference. Because of that ruling, all auto insurers in Georgia must now pay diminished value claims. In January 2002, Allstate settled a similar class action case in Georgia, agreeing to pay Georgia policyholders a total of $59 million for the diminished value of their cars repaired...

Albright says that in several flood-damaged cars his group has seen, a vehicle's entire electrical system was damaged and the insurance company did not total the vehicle. Instead, insurers paid for repairs to "substantial portions" of the electrical systems. "The problem is that this type of work is almost always done at a dealership, which identifies the vehicle in a nationwide computer network as a flood-damaged vehicle. The resale value of that vehicle immediately plummets to pennies on the dollar," he says.

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