An Ohio couple whose vehicle was wrecked are entitled to more than just the money it will cost to repair it, according to a state appeals court ruling that found the couple also should be compensated because the accident reduced the value of their vehicle.
Consumer advocates say the ruling could help other drivers in Ohio who have seen the value of their vehicles reduced by an accident.
Duke and Cheryl Rakich bought a GMC Yukon for $49,000 in 2003. Several months later the sport utility vehicle was broadsided.
Nationwide Insurance paid $8,000 for repairs, but when the Rakich’s decided to resell the car, fearing the car was no longer safe, they received offers about $6,000 less than if the car had not been through an accident.
The July 24 ruling by the 10th Ohio District Court of Appeals in Columbus said the Rakich’s could seek more than the repair costs, and could ask Nationwide for the car’s “diminished value.”
The ruling requires Franklin County Common Pleas Court Judge Eric Brown to hold a hearing to figure out how much the Rakiches are still owed.
Scott Smith, attorney for the couple, said the ruling should have implications statewide, and could mean millions of dollars for consumers. Insurance companies have for years fought against paying diminished value, and many people haven’t realized they could claim more than just repair costs, he said.
“This is a windfall the insurance industry has received over the decades,” Smith said. “The insurance industry has been unjustly enriched for not paying what they should have paid.”
Nationwide spokeswoman Nancy Stelzer said Friday that she couldn’t comment on pending litigation. The company has until Sept. 8 to appeal to the Ohio Supreme Court.
If the Supreme Court upholds the appeals court’s ruling or refuses to hear the case, other Ohio lawyers could use it to seek payments for diminished value.
But Dean Fadel, vice president of legislative affairs for the Ohio Insurance Institute, said the ruling did not represent a major change in state policy.
Some insurance companies already pay the diminished cost by compensating owners for a car’s market value, based on sale prices of similar vehicles in their communities, he said. And the only effect the ruling might have is if it inspires a number of lawsuits, which would then drive up premiums for all motorists, Fadel said.
The Ohio Department of Insurance is waiting to see if Nationwide appeals to the state Supreme Court before issuing an opinion on the appeals court ruling, Department Director Mary Jo Hudson said.
Was this article valuable?
Here are more articles you may enjoy.