Diminished value or loss in market value has been a real sore spot with insurers in the last couple of years. What is diminished value? Courts across the country have ruled that a loss in market value occurs even if the vehicle has been repaired properly. The reasoning is that damged and repaired goods are not worth as much as pristine goods.
Many insurers have consistently denied the fact that DV does exist. Insurers believe that a properly repaired car does not suffer any loss in value.
The insurance policy is supposed to be a bi lateral contract. That is that it equally represents the interests of both parties. Insurers have been giving appearance allowances and taking betterment and yet refused to admit that the other side of both of these issues is loss in value. If an insurer gives an appearance allowance for a minor damaged item I.E. a wheel, then they are admitting to diminished value. If an insurer can take betterment if the repairs increase the value of the vehicle, then the other side of that would be they owe the loss in market value if the repairs decrease the vehicle’s value. As you can see, this is very controversial and can create many heated discussions. In 2001 insurers began to put an exclusion in the policy that Loss In Market Value is not covered. Seems strange that they would exclude something that they have said never existed. Exclusions in the policy are for first party losses. First party losses are when collect from your own insurance carrier.If you are in an accident and the other person is at fault, that is a third party loss. Because third party losses are a kind of tort loss, DV is awarded in most instances.This section of the site will be devoted to the Diminished Value controversey.