Two cars collide, causing damage. The insured can opt to find someone to do the repair or have the insurer arrange for repairs by one of its affiliates. The latter is at a lower cost than the insured could obtain – but the insurer charges the going rate for repairs on the open market.

These facts raised three preliminary questions in Coles v Hetherton, [2012] EWHC 1599 (Comm): (1) is the insured’s measure of loss the reasonable cost of repair (i.e. on the open market) or the actual cost? (2) if the insurer arranges the repair, is the reasonableness of its cost judged in relation to what could have been obtained on the open market by the insured or by the insurer? and (3) where the vehicle is not a write-off, and the insurer has the damage repaired and pays for it, is the insured entitled to claim an amount up to the reasonable repair cost? Answers: (1) reasonable cost of repair, even if actual costs were lower; (2) what the insured could have obtained on the open market; (3) left for trial, but the judge drew the parties’ attention to the distinction between a claim for diminution in value reflected by the reasonable repair costs (recoverable regardless, presumably) and a claim for loss of use as reflected by those costs (recoverable only if the insured can establish consequential loss?).

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