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A New Jersey appeals court has ruled that insurance customers have no right to compensation for the loss in value that occurs when their vehicles are wrecked in crashes and then repaired through insurance coverage.

The panel [in Kieffer v. High Point Ins. Co.] said the carriers "agreed to compensate plaintiffs maintaining collision insurance coverage for damage resulting from vehicular mishaps with the repair or replacement of the damaged vehicle or actual cash value of the vehicle at the time of the accident, but expressly excluded diminution in value."

Each of the policies promised to pay the cost to repair or replace the vehicle but excluded coverage for diminished value: the difference between the price one could have obtained for it before the accident and what one would get for it afterward, with all the damage from the accident repaired. –New Jersey Law Journal

The original suits were filed in 2008, when vehicle owners sought compensatory damages for their vehicles’ diminished value after an accident, suing High Point Insurance Co, First Trenton Indemnity Co., and NJ Manufacturers Insurance Co. for breach of contract under the Consumer Fraud Act. The plaintiffs also sought an order requiring the carriers to notify their customers about the existence of diminished value coverage, and to pay diminished value claims in the future.

These suits were denied because the insurance policies were clear and unambiguous about not offering coverage for diminished value. But perhaps the time has come for carriers to change the offer. It makes sense for standard auto insurance policies to include diminished value coverage. Consumers pay hundreds and often thousands of dollars per year to these carriers, and should have the right to expect true compensation for monetary losses—particularly if they are not at fault for an accident.

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