Massachusetts diminished value law

Massachusetts permits diminished value claims if the accident was not the claimant’s fault. The statute of limitations for filing such claims is three years from the date of loss. These claims are submitted to the at-fault driver’s insurance company. Under Massachusetts tort law, a property damage victim is generally entitled to be restored to the position they would have been in had the accident not occurred. As outlined in Tort Law § 13.11, at 429 (3d ed. 2005), the basis for damages is compensation, not enrichment. Compensation must make the injured party whole but should not exceed that amount, as stated in Kattar v. Demoulas, 433 Mass. 1, 15 (2000).

Jarrett McGilloway et al. v. Safety Insurance Company and the Commerce Insurance Company
Supreme Judicial Court of Massachusetts
Precedential status: Precedential

In this case, the Massachusetts Supreme Judicial Court interpreted Part 4 (third-party claims) and Part 7 (first-party collision claims) of the 2008 Edition of the Standard Massachusetts Automobile Insurance Policy. The Court ruled that inherent diminished value is recoverable under a third-party claim (Part 4), but not under a first-party collision claim (Part 7). The ruling emphasized that not all vehicles lose value after repairs and that “individualized proof is required to demonstrate that a given automobile has sustained some form of diminution in value due to a collision or vehicular accident, even after repairs are made.”

The Court concluded that plaintiffs must prove: (1) the existence of diminished value damages and (2) the amount of such damages. However, Massachusetts policies issued after January 1, 2018 follow the 2016 Edition of the Standard Policy, which includes wording that disfavors diminished value compensation for third-party accident victims.