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17C Formula, Wrong for Diminished Value Calculations

17c Formula

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On November 28, 2001, the Georgia Supreme Court issued a ruling in the case of State Farm Mutual Automobile Insurance Company v. Mabry. (S01A0982).

This court ruling stated that physical damage resulting from a covered event can reduce the value of a vehicle, even if repairs return it to it’s pre-loss condition.. The Court determined that the insurance company involved in the case is obligated to assess diminution of value “…along with the elements of physical damage when a policyholder make a general claim of loss.”

The Mabry case was a class action lawsuit involving more than 25,000 insurance claims. In order to compensate claimants under this lawsuit, the court agreed to the temporary use of a generic formula. In paragraph 17 section “c” of its ruling, the court indicated this fact.

It is not hard to understand why a simple formula was used in this case. Obviously because of the large number of vehicles involved and the difficulty in having an actual appraiser assess the market value and the post-wreck amount in comparison to the pre-accident value.

Since 2001, State Farm and other insurance companies have been using the 17c formula and citing precedent. Their logic is fundamentally flawed, unless you actually took part of this class (you’re one of the 25,000 claimants), this ruling should NOT apply to you.

In addition, the Georgia Insurance commissioner executed a directive instructing insurance companies not to include language in their correspondence stating that 17c is the legal or final determination of Diminished Value. The directive also stated that insurers are required to consider evidence from consumers referencing loss in value. The commissioner continued to say that the GA insurance dept does NOT endorse 17c.

Because of the negative publicity 17c receives, other insurance companies, USAA for example, uses the 17c formula but call it something else, like the “Georgia worksheet” or “Diminished Value worksheet” etc… regardless, if a method uses the same components as the 17cformula it’s equally false.

This website’s mission is to shed the light on 17c and its clones, explain and demonstrate why its inaccurate and erroneous. This information can be used as a reference when negotiating with the insurance company only when authorized by the author. Request your free 17c formula insurance rebuttal letter.


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