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Letter to the Editor
Friday June 14
Florida Supreme Court Hands Diminished Value a Defeat
According to a report from ASA, in the case of Siegel vs. Progressive Consumers Insurance Co., the Florida Supreme Court has found the insurance policy does not cover inherent diminished value.
The Court found that "proper interpretation of the policy language at hand requires that we deem diminished value a loss not covered by this policy."
In an earlier decision, the Florida Fourth District Court of Appeal found that "having restored a vehicle to its pre-accident level of performance, appearance and function, and having complete top-notch repair, Progressive is not required to also compensate its insured for any remaining inherent diminution of value."
By contrast, in November 2001, the Georgia State Supreme Court ruled in the case of State Farm vs. Mabry that State Farm is responsible to pay their policy holders for financial loss associated with diminished value of the repaired vehicle.
As a result, the Georgia Insurance Commissioner issued Directive No. 01-P&C-1 to all insurers to "adjust claims accordingly, including assessment and payment of diminution of value relative to physical damage."
The Massachusetts Superior Court also upheld diminished value, finding that diminished value is covered under a Massachusetts auto policy.
The court accepted that diminished value is inherent in accidents involving property damage and that the concept of contractual mutuality holds that such a loss is covered.
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