Opinion ID: 2331228
Heading Depth: 1
Heading Rank: 4

Heading: Grant of Coverage

Text: ¶ 13 The Court of Appeals explained that the policy at issue covers loss to the insured's car and that loss is defined in the policy as direct damage. Moeller, 155 Wash. App. at 142, 229 P.3d 857. Finding no definition of direct or damage in the policy, the Court of Appeals looked elsewhere for definitions, noting that `direct' means a `causal relationship' and `damage' means `loss due to injury.' Id. at 143, 229 P.3d 857 (quoting 11 LEE R. RUSS & THOMAS F. SEGALLA, COUCH ON INSURANCE § 156:21 (3d ed. Supp. 2009) and WEBSTER'S THIRD NEW INTERNATIONAL DICTIONARY 571 (1976)). Given these definitions, the Court of Appeals opined that Moeller's collision damages have been repaired and Farmers paid for those repairs. But there remains damage that cannot be repaired, e.g., weakened metal. Farmers has not paid for this diminished value loss. Id. ¶ 14 The majority of courts to review the coverage piece of this question have agreed that diminished value is a loss contemplated under policies using similar provisions defining loss. Id. at 144 n. 8, 229 P.3d 857. This is consistent with the views of a leading commentator. A vehicle is not restored to substantially the same condition if repairs leave the market value of the vehicle substantially less than the value immediately before the collision. 12 LEE R. RUSS & THOMAS F. SEGALLA, COUCH ON INSURANCE 3D § 175:47, at 175-54 (2005). ¶ 15 Significantly, Farmers does not appear to dispute the notion that diminished value falls within the scope of the coverage grant in its policy, but it maintains that such coverage is foreclosed by policy language limiting Farmers' liability. The scope of the policy's coverage therefore turns on whether the limiting provisions unambiguously exclude diminished value loss.