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By one view, an automobile collision policy limiting liability to actual cash value or what it would cost to repair
or replace with an other of like kind and quality does not require that the repairs restore market value, but only restore physical condition. [FN72] By an opposing view, under an automobile collision policy with a
liability limit of the lesser of the actual cash value of the damaged vehicle or the amount necessary to repair or replace the vehicle, less the deductible, the term "repair" means restoration of the vehicle
to substantially the same condition and value as existed before the damage occurred, so that the correct measure of loss caused by collision is the difference in market value of the automobile immediately before the
collision and the combined amount of its market value immediately after being repaired, plus the deductible; thus, where the insurer elects to pay the insured the repair cost less the deductible, which was less than the
actual cash value of the vehicle, the insured was entitled to recover the difference in value of the vehicle before the collision and after the repairs, plus the deductible. [FN73] Stated otherwise, where the repairs by
the insurer under a collision policy did not substantially restore the automobile to its former condition and value, the proper measure of damages was the difference in the value before it was wrecked and the value
after it was wrecked, repaired, and tendered to the insured. [FN74] And, under yet another view, which may perhaps explain the different
conclusions actually reached in the foregoing cases, the issue of recovery of loss of value in addition to repair costs presents a question of fact under the particular circumstances; [FN75] where the fact finder
determines that the insured is entitled to recover any diminution in value, the insured could establish this loss by showing the reasonable value of labor and materials used for repairs and the amount of any permanent
impairment in value of the property after it is repaired, provided the aggregate of these amounts, together with loss on property while incapable of being used, does not exceed the value of the property immediately
before injury or damage together with interest thereon. [FN76]Observation: The insured should make a public policy argument that any formula used must be adequate to place the insured in the same position he or she
was prior to the loss. |
