Insurance Commissioner Issues Claims Directive

State Insurance Commissioner John Oxendine has issued a directive informing automobile insurance companies statewide regarding the proper handling of diminished value claims.

Oxendine's order makes it so all auto insurers cease using any language that implies that the Georgia Insurance Department has endorsed or approved a particular formula for determining diminution of value in physical damage automobile claims.

Diminished value is the loss of value in a vehicle that suffers damage and is then repaired. The commissioner had previously issued a directive seven years ago regarding the Georgia Supreme Court ruling that set precedent for diminished value claims. In the present, Oxendine wants to be sure that companies understand there is no single formula for determining the amount of diminished value to be paid in a particular claim.

"There seems to be some misunderstanding in the industry that a particular formula exists for diminished value," Oxendine said. "I want to clarify the matter by reminding insurers that my office has never issued any regulation requiring the use of a specific formula for determining diminished value, so each claim should be evaluated on its own merits."

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