More Diminution of Value and Automobile Material Damage Claims
Mabry applies to all insurance claims, not just auto, and if a repaired building is diminished in value because of the repairs the insurer may be required to pay for those diminution in value damages. Of course, since a repaired structure is usually more valuable than an old building, this issue will probably never be raised. Unlike an automobile, which will be depreciated by any accident no matter how skillful the repair job, the fact that a fire-damaged structure has been rebuilt with new for old will usually not diminish the structure’s value. The obverse of the Mabry case will not happen, since a repair that increases value beyond that before the fire will never raise the issue and there is nothing in an insurance contract requiring the insured to return to the insurer the difference between the value before the loss and the increased value after the loss.
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