Allgood v. Meridian Sec. Ins. Co., (Ind.App.)
May 5, 2004: Automobile – Policy covered diminished value of repaired vehicle.–Policy Interpretation.
Diminution in the value of a repaired automobile was within coverage for damage to an auto. The limit of liability provision allowing the insurer to repair or replace with like kind and quality was ambiguous as it could reasonably mean restoration to similar condition in appearance and function or similar appearance, function, and value. The insurer’s obligation to repair or replace a damaged vehicle with like kind and quality included restoring to the insured a similar value as prior to the damage.
Indemnity: Legal principle that specifies an insured should not collect more than the actual cash value of a loss but should be restored to approximately the same financial position as existed before the loss.
An insurer’s policy definition will supercede all other definitions of indemnity. However in my opinion, this is still vague and inexact.
Food for thought: I agree with the folks who state there would be unjust enrichment say, 5 to 10 years down the road. However, in those cases where cars are sold/traded sooner, say in 2 to 3 years, there IS a problem. Our very industry contributes repair stats to databases which “mark” a given vehicle as having been repaired. Just put a VIN number into one of the fee-based internet search services and you’ll see what I mean if a claim was paid on that VIN. Savvy consumers and dealers use these services and would become aware of accident history!! This issue is far from over.
How do you think you’ll feel when you’re the driver of the brand new car that gets nearly totalled in a collision that is not your fault but the good insurance company, rather than paying to replace it – which is what they should do, decides instead to pay for the “repairs” (which by the way can be up to 70% of the value of your new car) because it’s cheaper for them that way. No matter about your safety or the soundness of the repairs. Needless to say, after said repairs have been made, your brand new car is no longer new and now sqeaks, shakes and rattles, among other things, and you are forced to try and resolve this through the body shop (which could care less because they’ve already gotten their $13,000, $15,000, $17,000+ – it’s not their problem anymore – it’s your problem – you’ve just been screwed! And guess what? You can’t even sue the insurnace company anymore for the diminished value of your new car, which now of course, is not worth crap. And on top of that, you’ve got permanent neck and back problems. I don’t think you’d feel like you were fully compensated then. And I don’t think you’d give a **** about the premiums either. They’re already through the roof. And it’s not because of legitimate claims made by people trying to recoup their legitimate losses. It’s becuase of the greedy insurance companies who have been and will continue to screw over the little people like you and me. Now it’s just been made a little easier for them.
Some jurisdictions do recognize diminished value as legitimate part of damages in a liability claim. Iowa is such a state.
To me the great inequity occurs when a claimant collects diminished value & then drives the car for several years or until it has so many miles that the prior damage has no impact on the vehicle’s market value – that is where the system gets screwed & the claimant gains a wind-fall profit at the expense of the insurance industry & ultimately, the premium paying consumer.
tcf finally go the point- diminished value has never been a part of the Comp or Coll coverage. Why not have the states have an optional endorsement for it- those who wish to pay for it have the coverage. Don’t saddle the rest of us with the expense of a few.
Liability claim- you should be entitled to it.
Endorsements were developed for leasing companies for GAP, for an additional premium. Life is a risk and insurance does not cover everything.
If the suit was won, how much would the attorneys received? Last one I was involved in, I had a $2.50 refund in premium with the $millons going to the law firms- if you claim an insurance company is greedy- its an attorneys picture by the definition in the dictionary! jhb
Wait until you have a brand new vehicle legally parked and someone isn’t watching the road and rear ends your vehicle pushing it 15ft. Then look at over $11 grand in auto repairs on your brand new vehicle with a bent frame and a trade-in value from all 3 local dealers at $0.50 cents on the dollar so they can turn around and send it to auction. Pray this doesn’t happen to you or you’d wish you had re-thought your opinion on inherent diminished value! Not to mention that now your vehicle is clearly not back to the pre-loss value. Regardless of trade-in or resale. Go to auto-web or any of the other vehicle sites – Do you think you would pay the same for a vehicle that had over $11k in damages vs one that was never hit.
– RTS … does not get it, he/she is too woried about someone getting away with something they are currently or ever suspect they will get.
– Fact is that if an owner decides to drive, the now beat up, rattling car they are doing so with a real loss of quality and safety, as matter of choice ( a form of sweat equity), that is no windfall. If you are like the other parties forced to do so by the defeat of indemnity (failure to place you in pre-loss condition) you are not compensated and in equity this is a failure of the system. The ignorant consumed only with their own unenlightened self-interest will come around when they are forced to walk in the shoes of another.
– Logic and equity are the key and the higher rate issue is a red herring by the ill informed.
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Here is a recent case in California.
Allgood v. Meridian Sec. Ins. Co., (Ind.App.)
May 5, 2004: Automobile – Policy covered diminished value of repaired vehicle.–Policy Interpretation.
Diminution in the value of a repaired automobile was within coverage for damage to an auto. The limit of liability provision allowing the insurer to repair or replace with like kind and quality was ambiguous as it could reasonably mean restoration to similar condition in appearance and function or similar appearance, function, and value. The insurer’s obligation to repair or replace a damaged vehicle with like kind and quality included restoring to the insured a similar value as prior to the damage.
One definition of indemnity states:
Indemnity: Legal principle that specifies an insured should not collect more than the actual cash value of a loss but should be restored to approximately the same financial position as existed before the loss.
An insurer’s policy definition will supercede all other definitions of indemnity. However in my opinion, this is still vague and inexact.
Food for thought: I agree with the folks who state there would be unjust enrichment say, 5 to 10 years down the road. However, in those cases where cars are sold/traded sooner, say in 2 to 3 years, there IS a problem. Our very industry contributes repair stats to databases which “mark” a given vehicle as having been repaired. Just put a VIN number into one of the fee-based internet search services and you’ll see what I mean if a claim was paid on that VIN. Savvy consumers and dealers use these services and would become aware of accident history!! This issue is far from over.
Hey BL,
How do you think you’ll feel when you’re the driver of the brand new car that gets nearly totalled in a collision that is not your fault but the good insurance company, rather than paying to replace it – which is what they should do, decides instead to pay for the “repairs” (which by the way can be up to 70% of the value of your new car) because it’s cheaper for them that way. No matter about your safety or the soundness of the repairs. Needless to say, after said repairs have been made, your brand new car is no longer new and now sqeaks, shakes and rattles, among other things, and you are forced to try and resolve this through the body shop (which could care less because they’ve already gotten their $13,000, $15,000, $17,000+ – it’s not their problem anymore – it’s your problem – you’ve just been screwed! And guess what? You can’t even sue the insurnace company anymore for the diminished value of your new car, which now of course, is not worth crap. And on top of that, you’ve got permanent neck and back problems. I don’t think you’d feel like you were fully compensated then. And I don’t think you’d give a **** about the premiums either. They’re already through the roof. And it’s not because of legitimate claims made by people trying to recoup their legitimate losses. It’s becuase of the greedy insurance companies who have been and will continue to screw over the little people like you and me. Now it’s just been made a little easier for them.
Sorry, BL, my first post was meant for Curt.
Some jurisdictions do recognize diminished value as legitimate part of damages in a liability claim. Iowa is such a state.
To me the great inequity occurs when a claimant collects diminished value & then drives the car for several years or until it has so many miles that the prior damage has no impact on the vehicle’s market value – that is where the system gets screwed & the claimant gains a wind-fall profit at the expense of the insurance industry & ultimately, the premium paying consumer.
tcf finally go the point- diminished value has never been a part of the Comp or Coll coverage. Why not have the states have an optional endorsement for it- those who wish to pay for it have the coverage. Don’t saddle the rest of us with the expense of a few.
Liability claim- you should be entitled to it.
Endorsements were developed for leasing companies for GAP, for an additional premium. Life is a risk and insurance does not cover everything.
If the suit was won, how much would the attorneys received? Last one I was involved in, I had a $2.50 refund in premium with the $millons going to the law firms- if you claim an insurance company is greedy- its an attorneys picture by the definition in the dictionary! jhb
Wait until you have a brand new vehicle legally parked and someone isn’t watching the road and rear ends your vehicle pushing it 15ft. Then look at over $11 grand in auto repairs on your brand new vehicle with a bent frame and a trade-in value from all 3 local dealers at $0.50 cents on the dollar so they can turn around and send it to auction. Pray this doesn’t happen to you or you’d wish you had re-thought your opinion on inherent diminished value! Not to mention that now your vehicle is clearly not back to the pre-loss value. Regardless of trade-in or resale. Go to auto-web or any of the other vehicle sites – Do you think you would pay the same for a vehicle that had over $11k in damages vs one that was never hit.
– RTS … does not get it, he/she is too woried about someone getting away with something they are currently or ever suspect they will get.
– Fact is that if an owner decides to drive, the now beat up, rattling car they are doing so with a real loss of quality and safety, as matter of choice ( a form of sweat equity), that is no windfall. If you are like the other parties forced to do so by the defeat of indemnity (failure to place you in pre-loss condition) you are not compensated and in equity this is a failure of the system. The ignorant consumed only with their own unenlightened self-interest will come around when they are forced to walk in the shoes of another.
– Logic and equity are the key and the higher rate issue is a red herring by the ill informed.
End…