If you were recently injured in an accident someone else caused, that person may owe compensation for what you have suffered. You may seek reimbursement for your medical bills, lost income, and property damage; you may even be aware of pain and suffering and other non-economic losses. But are you aware of diminished value claims?
One type of loss you might overlook is the diminished value of your car. Auto shops might not fully repair the damage your vehicle sustained. Even if they can, a car with an accident history has an inherently lower value than a comparable vehicle without one.
However, you can pursue financial recovery for this loss through a diminished value claim. The Texas car accident lawyers of The Wilhite Law Firm have extensive experience and a proven track record of maximizing diminished value compensation for clients. We can guide you through the process.
What Is a Diminished Value Claim in Texas?
A diminished value claim in Texas allows a vehicle owner to pursue compensation from a driver at fault for a motor vehicle accident for the loss of value of the owner’s car following a crash. No matter how much damage the vehicle sustained in the collision, every car will experience a diminution in value after a motor vehicle accident. Even if the vehicle’s owner fully repairs the car, its history report will reflect that it suffered damage in an accident, which can reduce the car’s value to potential buyers. Diminished value claims also allow vehicle owners to recover other expenses or losses from accident damage.
What Are the Different Types of Diminished Value Claims?
A vehicle owner in Texas may pursue recovery for various losses arising from accident damage. Types of diminished value claims include:
- Repair-related diminished value — Includes the loss of value related to the inability to return the vehicle entirely to its pre-accident condition. Repair-related diminished value compensates a vehicle owner for improperly performed repairs or repairs that adversely affect the vehicle’s performance or safety.
- Immediate diminished value — Compensates a vehicle owner for the difference in vehicle value before and after a motor vehicle accident.
- Inherent diminished value — Provides compensation for the difference in value between a repaired vehicle and an identical vehicle with no accident history. Inherent diminished value reflects that vehicles with accident histories traditionally have lower values than an identical counterpart with no accident history would.
What Factors Affect Diminished Value Claims in Texas?
Different factors can affect the amount of money you might recover in a diminished value claim. These factors relate to the vehicle’s value before and after you got involved in the accident. Examples of factors used to determine compensation for a diminished value claim include:
- Nature and extent of accident damage to your car
- Cost to repair the vehicle
- Quality of repairs
- Value of a similar vehicle that had not been in the accident
- Vehicle’s age
- Vehicle’s mileage
- Vehicle’s make and model
- Vehicle’s accident history
- Market trends.
To calculate diminished value, insurers typically determine the vehicle’s value before the accident, which they may look up through national vehicle value guides like Kelley Blue Book or NADA. Then, the insurer will take ten percent of that value as a “cap value.” The insurer next multiplies the cap value by a damage multiplier ranging from 0.00 to 1.00 based on the severity of the accident damage. Finally, the insurer takes the product from the damage multiplier and applies a mileage multiplier between 0.00 and 1.00 based on the vehicle’s mileage at the time of the accident.
How Do You File a Diminished Value Claim in Texas?
You can file a diminished value claim by submitting a claim to the at-fault driver’s insurance company. However, if you caused the accident, you may have the right to file a diminished value claim with your own insurance company if you have collision/comprehensive coverage. Before filing your claim, you should gather all relevant information regarding your vehicle’s pre- and post-accident value, including the following documentation:
- Price guide estimates of the vehicle’s pre-crash value (such as Kelley Blue Book or NADA estimates)
- Accident damage repair records
- Bills and invoices for repair costs
- Appraisals of your vehicle’s value post-accident and post-repairs.
What Can I Do If the Insurance Company Denies My Diminished Value Claim?
Insurance companies often try to minimize or deny compensation for a diminished value claim. Insurers may underestimate a vehicle’s pre-accident value, overestimate its post-accident value, or claim that accident repairs failed to restore the vehicle to a pre-accident condition. When an insurer undervalues or denies your diminished value claim, you should immediately speak with a car accident attorney. An experienced attorney can follow the insurer’s internal appeals process to challenge the denial of your claim or the amount of compensation offered.
An attorney can negotiate with the insurance adjuster to convince them to increase the settlement offer to an acceptable amount. However, suppose the insurer refuses to pay fair compensation. In that case, you can file a diminished value lawsuit or pursue your claim as part of your car accident lawsuit if you incurred other losses due to the accident.
What Is the Statute of Limitations to Recover My Diminished Value?
Under Texas’s statute of limitations, you typically have two years after a car accident to file a claim to pursue financial recovery of the diminished value of your car. Although two years may seem like plenty of time to pursue your claim, don’t wait to talk to a car accident attorney about your diminished value claim. Filing your claim after the deadline passes exposes you to losing your right to compensation for your car’s diminished value. For this reason, contact a lawyer as soon as possible after a car crash to ensure you file your diminished value claim on time.
Contact a Texas Personal Injury Lawyer
After a car accident in Texas, you may have the right to pursue financial recovery for the diminished value of your vehicle resulting from the damage it sustained in the crash. Contact our law firm today on 303-466-3529 or through our online form for a free, no-obligation consultation with a car accident lawyer to learn more about diminished value claims in Texas and get help pursuing the compensation you deserve in an insurance settlement.
