QUESTIONS: What happens in cases where you have an accident with an old car and the damage value is higher than the car’s value? Can you claim the full cost or should you be satisfied with receiving a refund of the value of the machine? What does “compensation for equivalent” include?
Considering the existing car fleet in Italy (with an average age of almost 10 years), there are not a few cases of traffic accidents with damages exceeding the value of the machines involved, for the repair of which insurance companies offer insufficient compensation.
Let’s see what the law provides and what the Supreme Court has determined in the specific case where the costs to be incurred must be higher than the total value of the damaged car. Finally, let’s see which expenses it is possible to get reimbursed in case of compensation for the same.
WHAT THE LAW PROVIDES
According toArticle 2056 of the Civil Code, regarding “assessment” of damages, compensation must be assessed by the judge based on the circumstances of the caseas laid down in articles 1223, 1226 and 1127.
Especially according to the articles referred to:
- the compensation must thus include the loss suffered as well as any lost earningswhich is an immediate and direct consequence (art. 1123);
- if the damage cannot be proven in its exact amount, it is liquidated by the judge with a reasonable assessment (Article 1126);
- if the creditor has contributed to the damage with his negligent behavior, the compensation is reduced according to the seriousness of the fault and the extent of the resulting consequences. Compensation is not due for damages which the injured party could have avoided by exercising ordinary care (art. 1127).
With regard to compensation for damage to cars, the Supreme Court has distinguished betweencompensation in a specific form“When it concerns the sum necessary to remedy the damage” Andcompensation for the equivalent, “Payment of an amount corresponding to the difference in the value of the asset before and after the damage, when the repair costs significantly exceed the market value of the vehicle“. The Supreme Court held that in legal matters relating to specific claims for damages “the sum of money necessary to carry out the repair of the damages” had been requested, stating: “If this sum significantly exceeds the car’s market value, on the one hand it is disproportionately burdensome for the injured debtor, and on the other hand it ends up being an enrichment, a profit for the injured party. It follows that, in the event of a significant difference between the commercial value of the damaged vehicle and the necessary costs of the necessary repairs, the judge can award the injured party (and in the case of a direct action the insurance company) compensation for the equivalent of the damage”. (Cass. 04/11/2013, n. 24718; Cass. 26/05/2014, n. 11662; Cass., 28/04/2014, n. 9367). In a nutshell, those who suffer damage have the right to be compensated for the loss suffered, but the compensation must not constitute an enrichment for the injured party. Or the refund must not “substantially” exceed the value of the damaged car. It is therefore clear that compensation of, for example, 2,000 euros cannot be claimed if the damaged car was only worth 500.
The use of expressions such as “Significantly exceeds”And “remarkable difference”, refer to the market value of the car compared to the cost of the repair, it left some discretion to the judges in the event that a dispute arose due to a lack of agreement. Discretion in the sense that the judgetaking into account the circumstances of the specific case, he must not consider the difference to be “substantial” and decide on concrete compensation, even if it exceeds the car’s value. Returning to the example above, a repair cost of 700 – 800 euros for a car worth 500 euros, maintained in perfect condition, cannot be considered “significantly higher”. Perhaps not for a car kept in poor condition, in which case the injured party would obtain unjust “enrichment”.
REPLACEMENT FOR EQUIVALENT
In the event of a significant difference between the car’s value and the repair costs or in the event that it is not realistically possible to continue with a reactivation of the vehicle to the conditions it had before the accident, the insurance is obliged to provide an offer of compensation for the equivalent. According to the recent jurisprudence of merit judges, the insurance company cannot limit itself to only replacing the market value of the vehicle at the time of the accident. This amount must be increased by all the expenses that the injured party has had and must pay as a result of the accident. If the repair is not possiblee.g, in addition to the car’s commercial value, the insurance company must pay:
- any costs for rescue, towing and storage of the accident vehicle;
- the costs of demolition or scrapping;
- the costs of registering or transferring ownership of a new vehicle:
- possible rental of a replacement vehicle;
- of the property tax and insurance for the paid and unused period.
VERY RECENT DECISION
A very recent judgment of the Supreme Court published on July 14, 2022 n. 22254 made headlines for stating that it has no bearing on the registration year of the car or its actual value, the damage must be compensated regardless of the car’s value. It should be noted that the phrase does not refer to damage as a result of a traffic accident, concerning a car of little value, where the insurance company is obliged to pay compensation. In this case it was a vintage car, the damage had come to light during a meeting of “aesthetically designed cars”, and the dispute arose between the owner of the car and a body shop, which was ordered to pay damages for “improper execution of car beautification works”. The attempt to enforce this judgment in the courts for cars of low value in the event of a traffic accident to obtain compensation for the entire expense seems to me to be of little use, not to say redundant.