Oregon Supreme Court: Diminished Value Coverage, Auto Accidents
Posted on behalf of RizkLaw on Oct 24, 2008 in Insurance Issues
On October 23, 2008 the Supreme Court of Oregon decided a case which will likely require many insurance companies to pay for diminished value of a vehicle caused by an accident. In the decision, Gonzales v. Farmers Insurance, Oregon’s highest Court stated:
“We hold that “repair,” as used in the policy at issue in this case, requires defendants to restore plaintiff’s vehicle to its pre-loss physical condition. If defendants do not or cannot so restore plaintiff’s vehicle, defendants must compensate a plaintiff for the diminished value of the vehicle.”
When a car is in an accident, its value is diminished because any reasonable buyer would pay less for a vehicle which had been involved in an accident—even if the vehicle had been completely repaired. For years, many Oregon insurers have resisted paying for this lost value. After Gonzales v. Farmers, it appears that insurers whose policies don’t explicitly exclude diminished value in this situation will be required to pay it. Few if any auto insurance policies excluded diminished value prior to 2003 and most still do not.
Finally, Oregon consumers get some relief from aggressive insurer tactics. But the fight is not over. Oregon still needs a comprehensive statutory bad faith claim with a punitive damage provision to punish insurers who place their financial interests ahead of their insured’s. You can help by telling your Oregon legislative representative that you support a “punitive damage bad faith law” to protect Oregon consumers from aggressive insurer tactics.
Are you struggling with an insurance agent while trying to obtain a damages claim after a car accident? Contact an experienced insurance claims lawyer in Portland from Rizk Law today. Our founder, Richard Rizk, worked for many years at the inhouse counsel to numerous insurance agencies and has a thorough understanding of how insurance companies handle claims. Call today for your free consultation. Ph: 503.245.5677.