Mass. High Court Rejects Claim for Diminished Value Coverage Under State Auto Policy

The Supreme Judicial Court of Massachusetts, the highest court in the Commonwealth, ruled Tuesday in favor of The Commerce Insurance Company, overturning an April 2002 trial court decision that would have reportedly required Commerce to cover a claim for the “inherent diminished value” of a vehicle that was damaged in an accident.

In this case, titled “Elena Given v. The Commerce Insurance Company,” the plaintiff, Elena Given, reportedly sustained damages to her automobile as the result of an accident in 2000. She acknowledged that Commerce paid to have the physical damage to her car fully and properly repaired.

In addition to the repair of her car, however, Given reportedly sought recovery from Commerce for the inherent diminished value of her automobile as a result of the accident, which she argued was the difference between the market value of her automobile immediately before the accident and the market value after the full repairs. The Supreme Judicial Court rejected Given’s claim and decided in favor of Commerce, stating in its decision that,

“Having paid for the full cost of repairing the vehicle, Commerce was not obligated to pay anything more under any theory.”

The Court’s decision is based on its interpretation of the Massachusetts Standard Auto Policy, which is determined and controlled by the Massachusetts Division of Insurance and required to be used by all insurers operating in the Commonwealth.