S.C. Supreme Court Ruling on Diminished Value Applauded

March 26, 2003

The Alliance of American Insurers praised a ruling by the South Carolina Supreme Court that limits the amount insurers must pay to repair damaged vehicles. The ruling came in a case involving a State Farm policyholder who argued that the company should pay for the full restoration value of his damaged pickup truck in addition to the actual repair costs.

“The South Carolina Supreme Court has strongly reinforced the true meaning of the basic auto insurance policy,” said Alliance Director of Claims, Kirk Hansen. “Policies are intended to provide for the cost of repairs necessary to restore the vehicle to its previous operating condition and appearance.”

Hansen said nearly a dozen states have now ruled against the concept of diminished value, and only Georgia has gone in the opposite direction in the case of State Farm v. Mabry in 2001. The South Carolina ruling is significant in that the plaintiff based his case on the Georgia ruling.

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