diminished value

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diminished value (uncountable)

  1. (law, insurance) A compensable loss in a property item's value after having been damaged and subsequently repaired or, in the case of a construction, having been constructed improperly or not according to contract.
    • 2009, Circo, Carl J.; Christopher H. Little, A State-by-state Guide to Construction & Design Law, Chicago: American Bar Association, →ISBN, page 1129:
      Damages are awarded for defects and omissions in the performance of construction contracts giving the damaged party what was contracted for or its equivalent. [references] The primary measure of defect damages is the cost of either correcting the defect or supplying the omission. This is known as the cost-of-correction rule. [references] This measure will be applied even though it may cost somewhat more to correct the defects than to have constructed the improvement to real property properly in the first place. Nevertheless the diminished value rule will be applied instead if correcting the defect or supplying the omission involves unreasonable economic waste because the cost of correction is materially disproportionate to the increased value that it would produce. The recovery for diminished value is the difference between the value the improvement would have had if properly constructed and the value as actually constructed. If, after construction defects have been corrected, the building still does not have the value it would have had if it had been constructed properly, the property owner may be able to recover both the cost-of-correction and the remaining diminished value.
    • 2014, Liraz, Meir, Cheap Car Insurance: How to Slash Your Auto Insurance Costs and Get Cheap Quotes, Liraz Publishing, →ISBN:
      Most automobile insurance policies, however, exclude coverage for diminished value.
    • 1905, In re the Income Tax Cases, Hydraulics Company Case, in Supreme Court of Victoria (Australia), The Victorian Law Reports, p. 186:
      In assessing the income of the company for taxation the Commissioner allowed the claim for deduction for the actual cost of repairs and renewals, but did not allow any claim for diminished value.