Cases

Auto. Policy Diminution in Value: Martins v. Vermont Mutual Insurance Co. – Order

THE UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS RECENTLY concluded that Part 4 of the Standard Massachusetts Automobile Policy does not provide coverage for inherent diminution in value.

The Plaintiff alleged that defendant Insurer improperly failed to pay damages for the “inherent diminution in value” of his automobile after an accident caused by one of its insureds. “Inherent diminution in value” refers to the fact that a vehicle involved in an accident typically has a lower market value, even after repairs have been made, due to a stigma attaching to such vehicles. 

The Plaintiff contended that an insurer is required to compensate for such a loss under Part 4 of the 2008 Standard Massachusetts Automobile Policy.  The Court concludes that Part 4 of the Standard Massachusetts Automobile Policy does not provide coverage for inherent diminution in value.