Alliance Reports Court Ruling on Diminished Value a Win for Insurers

October 9, 2003

A ruling by Massachusetts’ highest court regarding repair of damaged vehicles is a strong victory for the insurance industry, according to the Alliance of American Insurers.

On Oct. 7, the Supreme Judicial Court of Massachusetts overturned a lower court ruling against Commerce Insurance Company (Given v Commerce Insurance) that would have forced the company to pay more than the actual cost of repairing the policyholder’s damaged car to cover the “diminished value” of the vehicle.

The Alliance has reportedly been active in efforts to fight the “diminished value” concept around the country.

“There is a great deal of evidence that proper vehicle repairs do not affect the resale value of automobiles,” said Alliance Director of Claims Kirk Hansen.

“Though there are well over 60 million automobiles in the country that have been repaired as a result of accidents, none of the price appraisal guides, such as the NADA Official Used Car Guide or Kelley’s Blue Book, consider prior accidents when publishing the value of used cars. There are no used car dealers that sell a class of diminished value cars.”

Hansen said the ruling in the Given case is in step with the rest of the country.

Georgia has the only state supreme court that has ever supported the concept of first party diminished value.

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