When you get in a car accident, sometimes you suffer a personal injury. Other times, you experience loss in the form of property damage. Typically, the property damage that you suffer is some form of damage to your car. In Texas, the person who is to blame for an accident bears the liability for the damage that the accident causes. This means they are responsible for compensating you for medical bills, lost wages, and any property damage they cause.
A diminished value claim is a way to recover property damage from a responsible party. However, many people have never heard of a diminished value claim. Because diminished value claims are critically important in recovering damages, The Zimmerman Law FIrm put together this quick guide on diminished value claims in Texas.
Texas Fault Rules and Liability Insurance
Texas law looks at who caused an accident to determine who is liable for the damages the accident causes. The system is known as a modified comparative fault system. The system is comparative, as the law compares each party’s share of the blame to determine liability.
Each party, with limits, can recover the amount of damages they suffered minus the percentage attributed to them. Because Texas is a fault state, the law requires all drivers to maintain a minimum amount of liability insurance. Then, unless a lawsuit is necessary after an accident, the responsible party’s insurance company compensates the damaged party.
The system in Texas is called a modified comparative fault system instead of a pure comparative fault system. In a pure comparative fault system, regardless of percentage of fault, each party sees a reduction in compensation based on their own percentage of fault. If party A is 95% to blame for an accident and party B is 5% to blame, party A can still recover 5% of their total damages from party B.
The same result as outlined above would not happen in Texas’s modified comparative fault system. Instead, party A would not recover any damages from party B. This is because Texas’s modified comparative fault has a threshold of responsibility. If any party’s share of liability exceeds 50%, they cannot recover any damages from the other party.
What Is a Diminished Value Claim?
A diminished value claim is a way to recover property damages. When you are in an accident, the amount of damage to your vehicle can vary between minor scratches and other cosmetic damage on one hand, to rendering the vehicle entirely unusable on the other. In any case, the responsible party is liable for compensating you for that damage. If the car is unusable, that amount is the total value of the vehicle. If the car can be repaired, the amount is equal to whatever is necessary to restore the vehicle to its pre crash condition.
There is one problem, however: even if a mechanic and body shop restore your vehicle to its pre crash condition, it is very likely that your car will lose value. That’s because car crashes often cause various underlying problems that inherently damage the vehicle but are not always visible. To rectify the situation, you can file a diminished value claim with the responsible party’s insurance company. The amount of your diminished value claim is equal to the difference between your car’s value before the accident and your car’s value after the accident.
What Types of Diminished Value Are There?
There are three main types of diminished value. Depending on the circumstances of your case, you will want to file one of the following claims:
- Inherent diminished value,
- Immediate diminished value, or
- Repair-related diminished value.
Inherent diminished value refers specifically to the loss of a vehicle’s worth or market value. Inherent diminished value applies when you have made repairs to your vehicle but its value still decreases. Immediate diminished value refers to the difference in your vehicle’s resale value before the accident vs after the accident. Immediate diminished value applies only if you have not made repairs to your vehicle. FInally, repair-related diminished value refers to your vehicle’s loss in value because of faulty repairs, less reliable replacement parts, and any damage that has yet to be repaired.
How to File a Diminished Value Claim
You can file diminished value claims in Texas fairly easily. The process is similar to filing any other sort of insurance claim. To do so, you will need to gather evidence to demonstrate your vehicle’s diminished value. There are a couple ways to do this. Doing both will help to bolster your claim’s chances of success. First, you can look up your car’s Kelly Blue Book value before and after the accident. Second, you could go to a used car dealer for a valuation. Third, you could get a quote from an auto repair shop that accounts for all relevant damage. It always helps boolster your claim if you get more than one or two quotes on your vehicle.
Depending on the circumstances of your case, you should file one of two types of insurance claim. You will need to file either: A) a first-party insurance claim or B) a third-party insurance claim to recover diminished value damages. With a first party diminished value claim, you file the claim with your own insurance company because you were at fault for the accident. To do so, you need to have collision coverage, comprehensive coverage, or any other insurance product that covers property damage when you are at fault for an accident. You will need to file a third-party diminished value claim when someone else is at fault for the accident. You will do so through their insurance provider.
What If the Insurance Company Denies My Diminished Value Claim?
Sometimes insurance companies are quick to deny diminished value claims. One reason for this is that many attorneys do not take on diminished value claims unless they are already representing a party. Knowing this, insurance companies deny diminished value claims in hopes that the party making the claim will drop it. If you already have an attorney, you can have your attorney appeal the insurance company’s denial directly to them.
Otherwise, you can take your diminished value claim to small claims court or initiate litigation in your local court system to recover your vehicle’s diminished value. In any case, if an insurance company denies your claim, keep trying.
Are You Planning to File a Texas Diminished Value Claim?
If you are planning to file a Texas diminished value claim, don’t leave anything to chance. Instead, speak with an experienced car accident attorney regarding your diminished value claim as soon as possible. With a lawyer on your side from the start of the process, the insurance company is less likely to deny your claim outright.
The Zimmerman Law Firm can help you from the beginning of the process to the end. At The Zimmerman Law Firm, we have over 60 years of experience helping Texans recover damages and move on with their lives after car accidents. Car accidents can severely disrupt your life, but with a skilled attorney on your side, you can minimize the disruption. Our goal at The Zimmerman Law Firm is to help you get the result you want. Whatever it takes to get you there, we will do it.