BROADCASTS.com

b'

https://zalma.com/blog

When a car is damaged in an accident, then repaired, the resale value  may be less than that for a comparable car that has not been damaged. In  other words, the damage results in a reduction\\u2014or \\u201cdiminution\\u201d\\u2014in the  resale value of the auto. An insured\\u2019s claim for this reduction in value  may be made against a third party that negligently caused the damage to  the insured\\u2019s auto, or it may arise from a first party claim against  the insured\\u2019s own physical damage coverage.  With regard to first party claims, while it is perhaps arguable, the ISO  contract language\\u2014specifically the Limit of Liability condition\\u2014appears  to cover only the actual cash value (ACV) of the damage or the actual  cost to repair the damage. There is nothing in the policy wording that  even appears to contractually cover any reduction in market value, even  if the insured is able to prove the amount of reduction in value. On the  other hand, the policy clearly allows the insurer to deduct for  \\u201cbetterment\\u201d or depreciation, although the burden of proof is on the  insurer to demonstrate such depreciation or betterment. In physical  damage claims, the policy would allow the carrier to deduct for an  \\u201cimprovement\\u201d in value (i.e., betterment) due to repairs with newer  parts, but will not compensate the insured for a reduction in value due  to the same accident.   Third party claims for \\u201cdiminution of value,\\u201d on the other hand, have  generally been found by the courts to be covered by auto insurance since  the measure of damage in tort claims (which the insurer promises to  pay) is the difference in value of the property before the loss and  value of the property after the loss. For example, Texas court cases  have found that legal liability for third party damages includes  diminution of value.   \\xa9 2021 \\u2013 Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. He also serves as an arbitrator or  mediator for insurance related disputes. He practiced law in California  for more than 44 years as an insurance coverage and claims handling  lawyer and more than 52 years in the insurance business. He is available  at http://www.zalma.com and zalma@zalma.com.  

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals. 

 Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library \\u2013 https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and Read last two issues of ZIFL here.