The Damage Dilemma

Over the years, we received numerous calls from potential clients upset over the property damage settlement offered by the insurance company totaling the caller’s vehicle.

The typical lament goes something like this:

My car ran perfectly, was reliable, and paid for. The repair estimate was $7,500, but the adjuster said the fair market value is only $4,800. I can’t get anywhere near the car I had for $4,800. I just want my old car back.

This common situation results from the application of the standard legal measure of damages for the property. The damages are the difference between the value of the property just before the accident and its value just after the accident. Even if the property is totally destroyed and the “after” value is zero, the resulting sum can’t be any larger than the market value of the property at the time of the accident.

While the law provides that the cost to fix the damage can be considered as some evidence of the difference, the upper limit is the fair market value of the property. Simply put, you can’t recover more than the property is worth on the open market, even if the cost of fixing it is considerably more than the value. Recently, a small issue has appeared in that longstanding legal doctrine.

The Massachusetts Court of Appeals upheld a damage award for the “cost to cure” an injured pet. A veterinary bill of over $8,000 was held to be a reasonable recovery to treat and cure an injured dog that had been viciously attacked by another dog, even though the “market value” of the dog was much less. Traditionally, animals have been regarded by the law as property, subject to the same rules as other types of property.

This decision opens the door at least a little bit to the idea that repair rather than a replacement may be appropriate in some circumstances. However, most people admit that, no matter how attached some of us become to our vehicles, they aren’t in the same league as a beloved family pet. Therefore, don’t expect a court decision upholding the cost to pay thousands of dollars over market value to fix that 2004 Ford Focus anytime soon.