An Indiana court of appeals recently reversed a lower court ruling dismissing a diminished value suit, and remanded the case to district court, prompting an appeal to the state's supreme court.

In the case, Allgood v. Meridian Security Insurance Co., the appellate court held that the trial court erred in granting Meridian's motion to dismiss Allgood's claim for damages for failure to pay for diminished value. Meridian petitioned for a rehearing and insurance trade associations submitted an amicus curiae. The appellate court denied that petition, reaffirmed its decision, and remanded the case to the trial court for further proceedings.

"The court of appeals is going against the national trend which has rejected the diminished value argument," said Robert Hurns, counsel for the Property Casualty Insurers Association of America. "The language of the contract clearly does not require payment for diminished value when a vehicle has been fully repaired. In addition, there is no objective way to determine diminished value."