Does GEICO pay diminished value? GEICO makes no such promise on its claims pages, but in most places you can pursue that loss from the insurer covering the person who hit you. For people carrying their own GEICO policy, carriers have typically refused this kind of claim, and Georgia remains the one clear exception.
Claiming Lost Value From GEICO After Someone Else Hits You
Diminished value is the drop in what a car can sell for once a crash appears in its history, even after full repairs. When you seek that money from the insurer of the driver who was at fault, people call it a third-party claim. According to a report for the Connecticut General Assembly, most courts permit claims like these.
When a GEICO driver hits you, this is the claim you bring against GEICO. Each state has its own rules, so it is wise to learn yours before you commit a figure to writing.
Will GEICO Cover Lost Value for Its Own Policyholders?
In most cases, no. A state-by-state review from the law firm Matthiesen, Wickert and Lehrer notes that insurers have long taken the position that coverage for your own car does not extend to this kind of loss.
Georgia is the exception. Per a notice Liberty Mutual published for the state, Georgia's insurance commissioner directed every carrier to look for diminished value when handling claims. That order covers each company doing business there, GEICO among them.
GEICO's Payment Recovery Page
The payment recovery page on GEICO's site deals with the opposite situation, when someone else hits a GEICO customer. GEICO says it starts by determining fault. When the other driver is to blame, GEICO tries to get that driver or their insurer to cover the vehicle related damages.
GEICO names this process subrogation, which is your insurer getting back from the at fault side whatever it paid out. According to the page, GEICO will pursue your deductible plus the amount it paid. The term diminished value never appears there, so a GEICO customer should not count on GEICO recovering that loss on their behalf.
The Bloodworth Ruling and Uninsured Motorist Coverage
This part of your own policy pays out when an uninsured driver hits you. In GEICO v. Bloodworth, policyholders argued this coverage owed them the lost value of their cars. They also claimed GEICO neither paid that loss nor told its policyholders about it.
A lower court had approved a class made up of residents of 24 states, letting the matter proceed as one combined case. The Tennessee Court of Appeals ruled on July 2, 2007 that lost value, when correctly proved, may be recoverable. Still, the court vacated the class certification, meaning the combined case could not continue in its approved form.
The ruling is no guarantee that every uninsured motorist claimant will be paid for lost value. What it shows is that a court treated lost value as something recoverable when properly proved.
The Likely Size of the Lost Value
Per J.D. Power, many insurers rely on a formula known as 17c. The 17c method takes 10% of the car's pre-crash value, then reduces that figure based on how severe the harm was and how many miles the car has. Under 17c, a car at 100,000 miles or more receives nothing.
Market-based estimates frequently run higher. Below are the ranges this site uses, expressed as a share of the car's value right before the crash.
| Harm to the car | Portion of value lost |
|---|---|
| Severe frame or structural harm | 15% to 30% |
| Major frame harm across many panels | 10% to 20% |
| Moderate frame harm across several panels | 5% to 12% |
| Minor frame harm across a few panels | 3% to 8% |
| Only panels or bumpers, structure untouched | 2% to 5% |
For example, consider a car worth $25,000 before the accident, carrying 30,000 miles with moderate harm to the frame across several panels. The market range comes to $1,250 to $3,000, while 17c produces $1,000. At 100,000 miles or more, 17c drops to $0, while the market range stays between $1,250 and $3,000.
The commissioner in Georgia has indicated that depending entirely on a single formula may not be appropriate, per a summary of the Georgia directive. That supports showing more than a 17c number when you request payment.
How to File a Lost Value Claim With GEICO
A written claim is strongest when the adjuster can find all your proof in one spot. Follow these steps to keep things organized.
- Mark your claim number at the top of each page so every document stays with your file.
- Collect the repair estimate together with the final invoice, because both show how bad the damage was.
- Add pictures of the damage, best taken before any work was done.
- Include a vehicle history report showing the accident, since that entry is what drags down the resale price.
- Attach an appraisal or estimate that backs up the dollar amount you want.
- Send a brief letter naming the vehicle, the accident date, the repair bill and your requested amount, and ask for a written answer within 30 days.
- Save copies of all of it, because you might need them down the road.
If GEICO Stays Silent or Says No
Filing a complaint with your state department of insurance is an option open to you. A complaint carries more weight when you can present your letter, your supporting documents and the dates everything was mailed.