Driver Unsuccessfully Tries To Recover Damages For Diminished Value Of Vehicle Following Accident
After being involved in a motor vehicle accident, one of the first things people do is reach out to their insurance company to recover damages relating to injuries sustained by people involved in the accident as well as damaged vehicles. But what happens when an insured person is not satisfied with the repairs to their vehicle? The Provincial Court of Alberta addressed this issue in a recent decision.
The accident
The plaintiff was driving a 2008 Cadillac Escalade SUV on September 6, 2015 when he was involved in a collision with a moose. The insurer undertook and paid for repairs to the vehicle, but the plaintiff claimed the repairs performed were inadequate, and that additionally ,he had suffered additional loss by way of diminished value of his vehicle.
The plaintiff’s claims
The plaintiff’s claims were broken down as follows:
- a) Partial repairs of suspension damages from the accident – $3,525.18
- b) Partial repairs of transmission – $7,309.48
- c) Car rental and travel expenses – $493.42
- d) Excess mileage relating to repairs – $1,080.00
- e) Value of damaged car seat – $279.97
- f) Diminished value – $5,694.74
The plaintiff did not provide details relating to the diminished value of the vehicle, but argued that even if it was repaired to the same condition it was in prior to the accident, it would be worth less simply by virtue of the fact that it was involved in a collision.
The insurer’s position
The insurer argued that the vehicle was repaired to the condition it was in, or better, prior to the accident. They also claimed the diminished value claim is an indirect loss rather than a direct loss, with the former not being covered in the policy.
Analysis
The dispute boils down to an interpretation of Section C of the Alberta Standard Automobile Policy S.P.F. No. 1. Which states “The insurer agrees to indemnify the insured against direct and accidental loss of or damage to the automobile, including its equipment.” Section 4(5) states,
“The Insurer shall not be liable for more than the actual cash value of the automobile at the time any loss or damage occurs, and the loss or damage shall be ascertained or estimated according to that actual cash value with proper deduction for depreciation, however caused, and shall not exceed the amount that it would cost to repair or replace the automobile, or any part thereof, with material of like kind and quality …”
Based on this wording, the court found the claim could not be enforced, writing,
“that even if this diminished value claim were capable of being proven, such a loss is not covered by the subject policy of insurance as it is excluded by those words in Statutory Condition 4(5), that the liability of the insurer “shall not exceed the amount that it would cost to repair or replace the automobile, or any part thereof, with material of like kind and quality”. A claim for diminished value is a claim for additional depreciation arising from the accident and not a claim relating to the actual cash value of the vehicle immediately before the accident or the cost of repairs. Therefore, it is not a claim that can be made against a party’s own insurer pursuant to SECTION C of the Alberta Standard Automobile Policy S.P.F. No. 1. Regardless of whether any claim for depreciation is related to a value of total loss or repair, the liability of the insurer is capped at an amount not to exceed the cost of repair or replacement of the automobile with material of like kind and quality.”
At Derfel Injury Law we have over a decade of experience in representing clients who have been injured in motor vehicle accidents. We also understand how difficult it can be when your insurance company denies your claim for coverage. Our compassionate and professional approach seeks to ensure you are represented as best as possible through every step of your claim. Please call us at 416.847.3580or reach us online to see how we can help you today.