Motor Vehicle Accidents And Diminished Value – Part 2: Recovering Damages In Pennsylvania

In the first part of this article, I wrote about the different types of diminished value of a motor vehicle. I mentioned that an insured’s claim for this reduction in value may be made against a third party that negligently caused the damage to the insured’s automobile, or it may arise from a first-party claim against the insured’s own physical damage coverage. A few states do not allow a motorist reimbursement for diminished value. However, a driver may recover for diminished value in Pennsylvania.

Motor Vehicle Accidents And Diminished Value - Part 2: Recovering Damages In PennsylvaniaDiminished value is defined as the loss in the auto’s market value after an accident and any ensuing repairs. The average, reasonable car buyer will not pay the same price for a wrecked and repaired vehicle as a vehicle with a clean accident history, regardless of the quality of repair. Diminished value claims are sometimes considered purely speculative. However, drivers may establish diminished value of a motor vehicle by utilizing expert testimony without selling or trading the vehicle. An expert appraisal is usually necessary to determine the pre-loss and post-loss values of a vehicle.

In first-party claims, a party may recover only the cost of repair or restoration without regard to the diminution in value of the property. The Pennsylvania Supreme Court has held that such payment would not be normal and could not form the basis for a reasonable expectation by the public. Lobozzo v. Adam Eidemiller, Inc., 263 A.2d 432 (Pa. 1970). Munoz v. Allstate Ins. Co., No. 9906-2855 (Pa. Comm. Pl. 1999).

As to third-party claims, a plaintiff may recover (a) the difference between the market value of the vehicle before and after the accident, or, at the plaintiff’s election, the reasonable cost of repair or restoration if feasible, with due allowance for any difference between the original value and the value after repairs, and (b) the loss of use. Holt v. Pariser, 54 A.2d 89, 91 (Pa. Super. 1947.

In another 1994 case, the Pennsylvania Supreme Court recognized a claim for diminished value in the context of realty holding that if repairs do not fully compensate the plaintiffs, they should be compensated for their remaining losses. Further, permanent physical damage is not required if 1) Defendants have caused physical damage to Plaintiff’s property; 2) Plaintiffs have demonstrated that repair of this damage will not restore the value of the property, and 3) Plaintiffs have shown that there is an ongoing risk to their land. In re Paoli R.R. Yard PCB Litig., 35 F.3d 717 (3d Cir. 1994).

If you or a loved one has suffered any type of injury resulting from a motor vehicle accident, contact Powell Law at (570) 961-0777. The consultation is FREE and you don’t pay anything unless we win. Our attorneys, past and present, have represented motor vehicle accident victims for 110 years.

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