After a Texas car accident, your conversations with auto insurance companies may involve vehicle inspections, repair estimates, and coverage to repair or replace your vehicle. What you probably won’t hear your insurance agent talk about is your vehicle’s “diminished value.” Diminished value is a valid type of compensation you may be able to claim after a collision that damages your vehicle. Here’s what this type of claim means in Texas, and why you should bring it up during settlement negotiations with your insurer.
What Does “Diminished Value” Mean?
After a fender bender or more serious car crash, your insurance company (or the company of the at-fault driver) will typically offer to compensate you for the cost of repairs. You receive the check and get the repairs, and then your vehicle is good as new – right? Wrong. In many cases, the value of your automobile drops after being involved in an accident. Potential buyers can look at a wreck as a blemish on the vehicle’s history. They may argue that the accident and subsequent repairs altered the original vehicle, or worsened it in some way.
Diminished value describes the difference between what your vehicle was worth before the accident and what it is worth after repairs. An insurance company may try to say that there is no diminished value – that you can sell your repaired vehicle for the same price you would have had no accident occurred. This isn’t always true. Even if your repairs look perfect, a history of damage can deter buyers (inherent diminished value). If you have to replace your existing vehicle parts with different versions because the company won’t authorize certain repairs (claim-related diminished value), this can also result in a lower-value vehicle.
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How to File a Claim for Diminished Vehicle Value
If you were not at fault for your accident (and an act of God such as a fallen tree did not cause the damage), you could be eligible for diminished value compensation. Bring up diminished value to the insurance agent in charge of your claim. He or she might deny that it exists, or say he/she knows nothing about it. Be persistent, or retain the services of a diminished value claims attorney for assistance. You must prove three main points to qualify for diminished value:
- Your vehicle lost value.
- There is a specific dollar amount of lost value.
- The insurance company allows you to recover the diminished value.
To prove your claim, keep all receipts, estimates, and documents from the mechanic shop that performed the repairs on your vehicle. Document all new or replacement parts installed, noting whether they are aftermarket components or from the original equipment manufacturer. You must then establish the current market value of your vehicle, and prove that it is less than its value prior to the crash.
Do You Need a Claims Attorney?
A diminished value claim can result in hundreds or even thousands of dollars added to your insurance settlement agreement after a car accident in Texas. Proving your claim, however, can be a lot of work. Consider working with an attorney who specializes in diminished value claims to make the process easier and more rewarding. Even with legal fees, you could take home more money than you would have without a lawyer.
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About the Author Brian White
Brian White earned his J.D. from South Texas College of Law in Houston and is licensed to practice in Texas. He is a Board-Certified Personal Injury Trial Lawyer.
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