In the US state of Georgia, the formula applied with court backing since 2001 for determining how much a car’s value diminishes after a wreck and repair is “the difference between pre-loss value and post-repair value”.  Attorneys for two plaintiffs brought a class action alleging that the insurer was underestimating the value of repaired cars but they had no different formula to put before the court.

The court said “another generation of creative lawyers” had failed to show that the court-approved formula is commonly wrong.  The court pointed out that if any individual plaintiff alleged that their loss was undervalued they could litigate the claim.  In the absence of a replacement formula the plaintiffs could not show that the current method for determining diminished value across cars of all makes, model years, mileage and repair costs is wrong.

Similar formulas are usefully applied in South Africa and can similarly be challenged by any disgruntled insured.  Efficient working of insurance claims needs something more than a case-by-case assessment.

[Rashad Baker on behalf of others similarly situated v State Farm Mutual Automobile Insurance Co case no. 4:19 – CV – 14, Middle District of Georgia]