What is the current state of the law on a contract that requires an insurer to pay for any diminution in value of a damaged automobile as a result of its status as a wrecked car?

California, United States of America


The following excerpt is from Ray v. Farmers Ins. Exchange, 200 Cal.App.3d 1411, 246 Cal.Rptr. 593 (Cal. App. 1988):

I believe the correct and more enlightened view is that espoused by a majority of jurisdictions, that contract provisions which require the insurer when repairing or replacing a damaged vehicle with "other of like kind and quality" to pay for any diminution in value of the repaired automobile by reason of its status as a wrecked car. The reasoning of the court in Campbell v. Calvert Fire, supra, 234 S.C. 583, 109 S.E.2d 572, demonstrates the soundness of this position.

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