The diminished value of a postaccident, repaired car is a major issue in Moeller vs. Farmers Ins. Co. The Washington State Supreme Court held that a contract between an auto insured and its insured provides this coverage.
In this class action lawsuit, the lead plaintiff (Moeller), a Farmers insured, had his car damaged in a collision. Farmers paid for the repair of Moeller’s vehicle less the insured’s $500 deductible. Not satisfied with the repair, Moeller sued under a breach of contract theory. The argument was that Farmers had not restored Moeller’s car to pre-loss condition.
The overarching question before the State Supreme Court was, “[w]hat it means to pay for loss to an insured’s car, i.e., whether it means just restoring the vehicle to usable condition or also encompasses lost value.”
The Court held that the Farmers’ policy language ambiguous and construed it in favor of the insured. Thus, the plaintiff could seek recovery for repair of his car damaged and diminution of value.
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