Trends - No Coverage for Diminution of Auto Value
Courts across the US have heard many challenges over the past few years to insurance company declanations of coverage for claims by policy holders that auto insurance policies should compensate them for the reduced resale value of their cars after a loss. In most all cases the courts have concluded that beyond restoring an insured vehicle to pre-accident function, performance, and appearance, there is no contractual obligation to include compensation for any stigma of lesser value.
Without citing the specific cases here, most all courts followed the same analyses of the contract and applied the plain language of the policy to determine that the insurance company defendant did not owe beyond the repair/replace language contained in the contract.
Consumers will likely continue to expect their insurance to compensate them for either the real or perceived diminished value of their car, but there appears to be ample judicial support for insurance companies denying payments for those kind of claims.
Mechelsen, Inc. Darren McGraw, MBA, CRM, CIC mechelseninc.com
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