State Farm 17c Letter

Below is a copy of a cookie-cutter letter State Farm Insurance sends their policyholders after they receive a demand for Diminished Value. 

The letter clearly references the Mabry V State Farm court case and the  DV amount being offered is based on a formula from the ruling.

Below are quotes from this letter:

“For your further information, Section 10 of the March 6, 2002 ruling by the Mabry trial court
provides, in pertinent parts, that “State Farm’s use of the 17c formula is pursuant to the order of
the Court and the use of that formula is approved by the Court for the purpose of settling claims
of the Settlement Class and for the purpose of assessing the future Georgia claims for
diminished value. The Court hereby orders State Farm to continue the use of the 17c formula in
its assessment of diminished value losses sustained by State Farm policyholders making first
party claims under the collision, comprehensive and uninsured motorist coverages of their
Georgia insurance policies subsequent to November 30, 2001, unless a change in the law or
regulation permits”.

“The mandatory injunctions issued in the Court’s Orders of December 1, 2000, May 2, 2001,
and June 12, 2001 are dissolved. The 17(c) formula included in the June 12, 2001 order is an
acceptable methodology for assessing diminished value claims. State Farm’s use of the 17(c)
formula is pursuant to order of the Court and the use of that formula is approved by the Court for
the purpose of settling claims of the Settlement Class and for the purposes of assessing the
future Georgia claims for diminished value. The Court hereby orders State Farm to continue the
use of the 17(c) formula in its assessment of diminished value losses sustained by State Farm
policyholders making first party claims under the collision, comprehensive and uninsured
motorist coverages of their Georgia insurance policies subsequent to November 30, 2001,
unless a change in Georgia law or regulation permits a discontinuance of that practice or the
claim is pursuant to a policy accepted by the Georgia Insurance Commissioner and in
compliance with Georgia law that excludes or limits the scope of diminished value coverage,
that State Farm does not have to assess for diminished value claims resulting in total losses,
claims limited to glass replacement, claims relating to non-owned or temporary substitute
vehicles (as those terms are defined in State Farm’s Georgia automobile policies), claims
identified as closed without payment by State Farm and claims confined to emergency roadside
assistance or towing. State Farm cannot be found to have acted in bad faith by virtue of
applying the 17(c) formula to assess diminished value claims. In the event any Georgia
policyholder reports a loss or makes a property damage claim after November 30, 2001 and
asserts that State Farm’s application of the 17(c) formula constitutes bad faith pursuant to
O.C.GA.A. Sec 33-4-7, State Farm shall present a copy of this order to the policyholder and/or
to the appropriate court, if applicable. If such presentation does not end or resolve the dispute
regarding bad faith, State Farm may apply for and, in the appropriate circumstances, this Court
shall issue a show cause order to the policyholder so as to effectuate the terms and conditions
of this settlement. Neither plaintiffs’ counsel nor class members shall challenge in the future
State Farm’s use of the 17(c) formula, as State Farm as heretofore applied it, to assess claims
for diminished value and offer diminished value payments to Georgia policyholders, though
class members with respect to claims reported after November 30, 2001, are not prohibited from
disputing the amount resulting from State Farm’s use of the 17(c) formula in connection with
their individual future claims.”