Court Ruling on Diminished Value of Real Estate

One recent court ruling that has gone without mention is a Georgia Supreme Court ruling dealing with insurance payments for damaged real estate.

It has been law for some time that car insurers had to pay for repair to the car, but also provide for the lost value. Only recently did the court find homeowners or commercial building owners could get “diminution of value” payments when a home or business property is damaged. Each situation would be evaluated on a case-by-case basis, so the insurance company could claim that you did not suffer a diminished value.

The insurance company involved in the case that made its way to Georgia’s Supreme Court wants the court to reconsider its opinion. As the court has ruled in favor of the property owner once, it is likely that insurers will have to pay for repairs and the diminished value of that property.

If your roof was replaced as a result of a storm where your roof was torn off your house, it could result in an increased value in the property. However, this ruling benefits damages such as a cracked foundation or mold as a result of a burst pipe.

Insurance companies are warning that the ruling will lead to increased rates. We see this as a benefit for property owners, and see the diminished value as an insurable risk.

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