IND. SUPREME COURT TO DECIDE ‘DIMINISHED VALUE’ CASE:

A class–action case before the Indiana Supreme Court tests the question of whether an insurer is obligated to pay not only the cost of repairs but also an additional amount for the “diminished value” vehicles may suffer after being properly repaired. In Christina Allgood v. Meridian Security Insurance Co., the Court of Appeals held that Meridian’s auto insurance policy requires Meridian to pay for the diminished value. Insurers argue that Meridian’s policy language explicitly limits its liability to either the vehicle’s actual cash value or the amount necessary to repair or replace the vehicle’s damaged parts with repair parts of like kind and quality, whichever is less. The Des Plaines, Ill.–based Property Casualty Insurers Association of America, in conjunction with the Insurance Institute of Indiana and other industry trade groups, filed an amicus brief in support of Meridian because the Court of Appeals’ decision “not only creates unnecessary, cumbersome new law in Indiana, but also contradicts the strong national trend rejecting ‘diminished value’ claims,” according to the brief. Diminished value is the difference between the market value of a car before it has been in a collision and its value after it has been repaired.