A wealthy couple is murdered after a glamorous party—jewelry stolen, town abuzz. Their estate files an HO3 claim for the stolen jewelry and loss in home value due to the stigma. But does the policy cover reputational "diminution in value"?
Notable Timestamps
[ 00:37 ] - The scenario involves a wealthy couple poisoned in their mansion, with jewelry stolen and a claim submitted under their HO3 policy ISO 2011 edition.
[ 01:39 ] - Trivia Time! Who are the six main characters of the board game Clue?
[ 03:40 ] - Diminution in value refers to a property's market value being less than before a loss, even after full physical repair, due to stigma.
[ 04:35 ] - The common argument against covering diminution in value is that policies typically cover physical loss and physical repair, not consequential or economic losses.
[ 06:16 ] - First-party auto and property policies share similar loss settlement language.
[ 07:47 ] - In Royal Capital Dev., LLC v. Maryland Cas. Co., No. S12Q0209, 2012 WL 1909842, — S.E.2d — (Ga. 5/29/12) [reviewed at PLRB, Prop. Ins. L. Rev. 8462 (2012)], the court allowed for diminution in value in a first-party property claim, drawing an analogy to auto claims.
[ 08:50 ] - If there were physical traces like blood or bullet holes from the murders, it could potentially establish a physical loss, strengthening an argument for diminution in value, even if the cleanup cost itself is minimal.
[ 10:28 ] - Real estate experts or appraisers could testify by comparing the home's value without the incident to similar properties affected by negative events.
[ 13:04 ] - It's crucial to check your jurisdiction; while Georgia allows it, many states disallow it, and others have no specific case law on the matter.
[ 14:00 ] - Tim provides a recap of the points above.
Your PLRB Resources
FAQ: Diminution in Value in First Party Property Claims - https://www.plrb.org/documents/diminution-in-value-in-first-party-property-claims/
Coverage Question: Pet Dog Attacked Owner; Blood on Carpet - https://www.plrb.org/documents/pet-dog-attacked-owner-blood-on-carpet-pcq-2023-10-27-twh-b/
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The views and opinions expressed in this resource are those of the individual speaker and not necessarily those of the Property & Liability Resource Bureau (PLRB), its membership, or any organization with which the presenter is employed or affiliated. The information, ideas, and opinions are presented as information only and not as legal advice or offers of representation. Individual policy language and state laws vary, and listeners should rely on guidance from their companies and counsel as appropriate.
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