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New England Legal Foundation Files Amicus Brief Supporting Plain Language Interpretation of Insurance Policies

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For information contact: Camaryn Sapienza

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New England Legal Foundation Files Amicus Brief Supporting Plain Language Interpretation of Insurance Policies

 May 14, 2024

BOSTON – The New England Legal Foundation (NELF – www.newenglandlegal.org), the leading legal advocate for free enterprise and innovation in the region, has filed an amicus brief in support of Commerce Insurance Company, the defendant-appellee in Cubberley & another v. Commerce Insurance Co. (Massachusetts Supreme Judicial Court).

In this case, the issue to be decided is whether the 2016 Massachusetts auto insurance policy approved by the Commissioner of Insurance excludes coverage for the “inherent diminished value” (IDV) of a third party’s vehicle caused by an accident with the insured’s vehicle, and, if so, whether such an exclusion is allowed by Massachusetts insurance law. The IDV, as characterized by the Massachusetts Supreme Judicial Court, is the loss of market value of a car resulting from the stigma of being involved in an accident, even after the vehicle has been completely repaired.

The plaintiffs in this case argued they were entitled to IDV coverage; however, the Superior Court dismissed their complaint, concluding that the auto policy excluded any such coverage. The relevant policy language states that the third party’s vehicle is insured against “tangible property” damage, but “any decreased value or intangible loss” resulting from the incident is not covered.

In its amicus brief in support of the defendant, Commerce Insurance Company, NELF argues that the policy’s clear distinction between “tangible property” damage and any resulting “decreased value or intangible loss” to the property is coextensive with the Court’s definition of “property damage,” which includes both tangible and intangible damage. Furthermore, NELF contends that the IDV is covered by the policy’s explicit exclusion of “any decreased value or intangible loss.”

Ben Robbins, NELF’s Senior Staff Attorney and the author of the brief, stated that “a decision upholding the 2016 Massachusetts standard auto policy’s exclusion of IDV damages will honor the Legislature’s delegation of authority to the Commissioner of Insurance to approve such policy exclusions.  This, in turn, will enforce insurance policies according to their clear terms and preserve insurance companies’ legitimate expectations.”

NELF President Dan Winslow noted that “insurance companies need the predictability that policy language provides to keep premium costs aligned with risk. We are hopeful our advocacy is a win-win for both insurance companies as well as consumers who benefit from lower premiums.”

Read the full brief here.

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About the New England Legal Foundation: Founded in 1977, the New England Legal Foundation (NELF – www.newenglandlegal.org) is the leading non-partisan, non-profit public interest law firm in the region dedicated to economic liberty. NELF’s ongoing mission is to champion free enterprise, property rights, limited government based on rule of law, and inclusive economic growth. We believe that free enterprise is a foundational value of a democratic society and the best opportunity for people to lift themselves to prosperity.

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