Diminished Value Claim: Texas
A previously damaged vehicle is less valuable compared to a similar automobile with a clean history. This loss in market value is known as diminution of value in Texas and is recoverable through a diminished value claim. Diminished value claims in Texas are recoverable for third-party claimants who aren’t at fault for their accidents.
Summary – Texas Diminished Value Claims
Statute of Limitations: 2 years
Third-Party Diminished Value Claim: Yes
First-Party Diminished Value Claim: No, most insurance policies will exclude diminished value
Texas Property Damage Minimum Limits: $25,000 in coverage
Uninsured Motorist Coverage for Diminished Value: Yes, diminished value is covered when you’re struck by an uninsured driver with physical contact. You must file a police report as well. A $250 deductible applies.
Underinsured Motorist Coverage for Diminished Value: Yes
Texas Small Claims Court Limit: $20,000, attorney representation and appeals are permitted
How to File a Diminished Value Claim in Texas
Step 1. Obtain Proof of Your Car's Diminished Value.
Hiring qualified, licensed, independent, and competent diminished value experts is an excellent way to prove your claim. The better the appraisal, the better the chance of the insurance company accepting it and paying the claim faster and for more money. If you’re unsure what this amount is, engage a professional appraiser for help calculating diminished value in Texas.
Step 2. Submit Your Documentation (Diminished Value Appraisal) and Demand Letter for Review.
The ideal time to submit your claim is right after you get your vehicle repaired. It’s wise to file your diminished value claim as soon as possible. Typically, if the accident wasn’t your fault, you would file a diminished value claim in Texas with the at-fault driver’s insurance company.
If the other driver was uninsured, you can also file a diminished value claim with your own insurance company.
Step 3. Settle Your Claim.
Claims adjusters work to negotiate the lowest possible insurance settlement amounts. These professionals can choose to accept or deny your claim. If accepted, there’s also a risk of them offering a settlement amount that’s too low.
To receive the highest settlement, submit as much supporting documentation as possible and negotiate until the adjuster gets firm with their offer.
DVCHECK can help you recover your vehicle’s diminished value. Have questions? Call DVCHECK at (850) 201-1950. You can also submit an online request for a free estimate.
Using a Diminished Value Calculator in Texas
When working with diminished value claims in Texas, it’s important to look beyond flawed equations like the 17c Diminished Value Formula. Although often used by insurance companies, these faulty formulas typically underestimate the true market value loss after a collision.
The truest, most accurate diminished value calculator in Texas is through a professional, third-party appraiser — a neutral party not affiliated with any insurance carrier. At DVCHECK, we pride ourselves on taking a thorough approach for a fair, precise valuation, taking into account factors such as your automobile’s age, the type and extent of the damage, and comparing it to similar vehicles in the market with an accident history.
It’s crucial to note that overly simplified, inaccurate calculations offered by insurance companies, like the 17c, aren’t the be-all and end-all to calculate a diminution of value in Texas or anywhere else, designed primarily to reduce payouts.
These simple equations can’t match the precision and depth that DVCHECK provides. A detailed appraisal provides stronger evidence for your claim, helping you secure the compensation you deserve.
Texas Diminished Value Law
Texas is a state that allows drivers to file a diminished value claim if the accident wasn’t their fault. The statute of limitations for diminished value claims in Texas is two years from the date of loss. Diminished value claims are filed with the at-fault driver’s insurance company or your own company when struck by an uninsured driver.
The general rule for damages to personal property is that a plaintiff is entitled to an award of the difference between the reasonable market value immediately before and immediately after the injury to the property. Central Freight Lines, Inc. v. Naztec, Inc., 790 S.W.2d 733, 734 (Tex. App.—El Paso 1990, no writ).
Market value is defined as the price that the property would bring if offered for sale by a willing but not obligated seller and purchased by a willing, but not obligated buyer. Exxon Corp. v. Middleton, 613 S.W.2d 240, 246 (Tex. 1981).
Texas Standard Pattern Jury Instructions
Where repairs do not completely restore the former value of the property, a plaintiff may also recover the difference between the value before the occurrence and the value after repairs.
c. Difference in market value.
Consider the difference, if any, in the market value in __________ County, Texas, of the vehicle in question immediately before the occurrence in question and immediately after the necessary repairs were made to the vehicle.
Diminution of Value in Texas
Where repairs do not completely restore the former value of the property, a plaintiff may also recover the difference in market value before the occurrence and the value after repairs.
“Market value” is an amount paid for by a willing buyer who desires but isn’t required to buy from a willing seller who desires to sell, but is under no necessity to sell.
Texas law states you must disclose any accidents when selling a car. Once a potential buyer is made aware of an accident, most buyers aren’t willing to pay full market price for a car that’s been involved in an accident.
Like most states, insurance companies in Texas are not required to pay first-party Texas diminished value claims because of the language and terms of the standard Texas personal auto insurance policy. However, diminished value is recoverable for accidents caused by someone else or caused by an uninsured driver.
The Texas Department of Insurance has confirmed this in Commissioner’s Bulletin # B-0027-00 which states:
- An insurer may be obligated to pay a third-party claimant for any loss of market value of the claimant´s automobile, regardless of the completeness of the repair, in a liability claim that the third-party claimant may have against a policyholder. Further, an insurer may be obligated to pay a first-party claimant under the uninsured/underinsured motorist coverage provisions of the policy, for any loss of market value of the first-party claimant´s automobile, regardless of the completeness of the repair.
Texas Uninsured Motorist Property Damage Claims
The minimum amount of property damage coverage a person must carry in Texas is only $25,000. Once all the property damage expenses such as repair costs, rental bills, and diminished value exceed the at-fault person’s available policy limit, you are eligible for diminished value compensation under your own UM/UIM Property Damage coverage.
Uninsured/Underinsured Motorist (UM/UIM) Property Damage coverage will pay your expenses and diminished value from an accident caused by an uninsured motorist, a motorist who did not have enough property damage liability coverage or a hit-and-run driver. Using a professional appraiser to calculate your diminished value in Texas can help you determine claimable loss amounts.
