CAA Total Loss and Diminished Value 3 — Questions and Answers
Question 1: In the Georgia '17c' diminished value formula, what is the base loss of value?
- 25% of the repair cost
- 15% of the trade-in value
- 10% of the vehicle's pre-loss retail value (Correct answer)
- 5% of the original MSRP
Correct answer: 10% of the vehicle's pre-loss retail value
The 17c formula caps the starting base loss at 10% of the pre-loss value.
Question 2: In the 17c formula, what mileage multiplier applies to a vehicle with over 100,000 miles?
- 0.0 (Correct answer)
- 0.4
- 0.2
- 1.0
Correct answer: 0.0
Vehicles above 100,000 miles receive a zero multiplier, eliminating DV under 17c.
Question 3: Which court case led to the creation of the 17c diminished value formula?
- Allgood v. Meridian
- Siegle v. Progressive
- Mabry v. State Farm (Correct answer)
- Campbell v. State Farm
Correct answer: Mabry v. State Farm
Mabry v. State Farm (Georgia, 2001) required insurers to assess DV on first-party claims.
Question 4: A diminished value claim is most commonly pursued against which party?
- The vehicle manufacturer
- The claimant's own collision insurer in every state
- The repair facility
- The at-fault driver's liability insurer (Correct answer)
Correct answer: The at-fault driver's liability insurer
Third-party DV claims against the at-fault liability carrier are recognized in most states.
Question 5: Repair-related diminished value arises primarily from which factor?
- The owner's credit score
- Market fluctuations unrelated to the accident
- The vehicle's age at the time of loss
- Substandard or incomplete repairs such as poor paint match or improper parts (Correct answer)
Correct answer: Substandard or incomplete repairs such as poor paint match or improper parts
Repair-related DV comes from defects in the repair work itself.
Question 6: Which factor typically has the GREATEST effect on the amount of diminished value?
- The claimant's driving record
- The color of the vehicle
- Severity of damage, especially structural or frame damage (Correct answer)
- The number of previous owners
Correct answer: Severity of damage, especially structural or frame damage
Structural damage creates the largest buyer resistance and value loss.
Question 7: Immediate diminished value is best defined as:
- The depreciation from normal wear
- The cost of rental during repairs
- The loss after repairs are completed
- The difference in value right after the accident and before repairs (Correct answer)
Correct answer: The difference in value right after the accident and before repairs
Immediate DV measures the value drop between pre-accident and unrepaired condition.
CAA Total Loss and Diminished Value 3
In the Georgia '17c' diminished value formula, what is the base loss of value?