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Insurance industry counsel warns proposed auto-value changes risk double recovery and need precise drafting
Summary
Michael Farley of the Ohio Insurance Institute testified in opposition to Senate Bill 131’s initial form, urging careful drafting to avoid double recovery for vehicle owners and insurers and pointing to legal precedents that limit recovery to cost of repairs or market value difference.
At the committee’s third hearing on Senate Bill 131, Michael Farley, vice president and general counsel for the Ohio Insurance Institute, delivered testimony raising concerns about the bill’s approach to vehicle diminution-in-value claims.
Farley said his association represents insurers that write a large share of auto and homeowner coverage in Ohio. He described the practical claims process — compensating for repairs and restoring operability — and cautioned that plaintiffs should not be able to obtain both repair costs and the difference in market value (a double recovery). He cited a court decision (referred to in testimony as "Racket versus Anthem") and told the committee "a plaintiff may not recover both the cost of repairs to a vehicle and the difference in the market value of the vehicle immediately before" the accident.
Farley urged precise statutory language to prevent unintended double recovery and said insurers and claimants need clear rules about when diminished value is compensable and when repair costs suffice. He said endorsements such as new-car replacement are market-driven and noted that some coverages already address owners’ preferences for replacement but argued statutory changes must avoid overlapping or duplicative recoveries.
Committee notes: The record includes written opponent testimony from several trade organizations. The hearing was recorded as the committee’s third hearing on SB 131.
Why it matters: Legislative changes affecting post-crash valuation could affect claim outcomes, insurer exposure, and repair/settlement practices, particularly in cases involving newer vehicles and perceived loss of market value after repairs.
