Insurers Seek Review of Iowa Diminished Value Rule

The Iowa Administrative Rules Review Committee is being urged by insurer lobbyists to issue a session delay on rule changes to Iowa Code 191-15 that pertain to diminished value in third party claims so that the legislature may review the matter when it convenes in 2004.

The changes being recommended by the Iowa Division of Insurance would force insurers to consider diminished value as an additional measure of damages in all third party automobile claims based on its interpretation of the Papenheim v. Lovell case. In addition, insurers would be required to maintain a system of supervision and control to ensure compliance with this sub-rule.

Currently, Iowa has the lowest automobile premiums in the nation. However, with the adoption of this rule rates are estimated to jump by $250 per third-party claim, according to the National Association of Independent Insurers, an industry lobbying group.