Allstate Defeats Diminished Value Class Action

NU Online News Service, May 3, 4:26 p.m. EDT?An Illinois jury has rejected a class-action lawsuit claim against Allstate Insurance Co. that sought payment for loss in market value of customers' damaged vehicles in addition to the cost of repair.[@@]

The verdict for the Northbrook, Ill. insurer was handed down Thursday by a panel in St. Clair County Circuit Court in Belleville, Ill. It found against $300 million in diminished value claims lodged by 387,000 participants in the suit.

In addition to pleasing the insurer, the decision drew applause from an industry trade group, Property Casualty Insurers Association of America.

John Lobert, a senior vice president with Des Plaines, Ill.-based PCI said diminished value was a flawed concept and the verdict was "the latest opportunity for informed jurors to reject attempts by plaintiffs' lawyers to pervert the plain language of the insurance contract" excluding such claims.

He said plaintiffs from 29 states had their damage repairs paid for.

An Allstate spokesman Mark Siemienas said, since 1998 the company has modified its auto policy language to exclude or eliminate coverage for diminished value in 40 states. He said in some states regulation did not make this possible.

Judy Cates, who represented the plaintiffs, did not return a call for comment on whether clients would appeal the case.

The original plaintiffs, an East St. Louis, Ill., couple sued after they were paid $3,000 to repair their truck after two different crashes.

Mr. Lobert said PCI was disappointed "unfounded claims such as this are allowed to be brought as class actions that circumvent the clear regulatory system that state legislatures around the nation have put in place and support with tax dollars."

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Allstate Defeats Diminished Value Class Action

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