When you get in a car accident, sometimes you suffer a personal injury. Other times, you experience total 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 in Texas are critically important in recovering damages, The Zimmerman Law Firm put together this quick guide on diminished value claims in Texas.
If you have questions, please contact us today.
Key Takeaways: Diminished Value Claims in Texas
- A diminished value claim in Texas is based on the idea that a vehicle can be worth less after an accident even if it has been repaired. Buyers and dealers often pay less for a car with an accident history.
- Texas diminished value claims usually focus on the gap between the car’s pre-accident market value and its post-repair market value. That loss can matter even when the repairs look complete.
- Strong support for a diminished value insurance claim in Texas often includes repair records, market comparisons, dealership opinions, and valuation tools showing the vehicle’s loss in value.
- If an insurance company delays or denies a diminished value claim, it may still be possible to challenge the result and keep pursuing the loss. Documentation and claim strategy matter.
What Is a Diminished Value Claim in Texas?
Recover diminished vehicle value in Texas through a diminished value claim. A previously damaged vehicle holds less market value compared to an equivalent car with a clean history. This reduction, known as diminution of value, is recognized and recoverable under Texas law.
In Texas, if someone else’s negligence caused damage to your vehicle, you can file a diminished value claim. This means you’re seeking compensation for the decreased worth of your car due to the accident.
This claim is based on the reduced value of your car due to the accident, even after it has been repaired. In Texas, the process for pursuing a diminished value claim involves specific legal procedures that must be followed to ensure a successful claim.
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.
If you were in a car accident, you could have the legal right to bring a compensation claim. It would be best to have a Texas car accident lawyer with the skills and experience necessary to protect your rights and obtain the full value of what your car is worth.
At The Zimmerman Law Firm, we know the tactics that insurance companies use to undervalue your claim. Let us help protect your rights and fight for the maximum compensation possible.
It’s Frustrating When Repairs Do Not Fully Fix the Financial Damage
Most people assume that once the body shop repairs the vehicle, the problem is over. But diminished value claims in Texas exist because a car can still be worth less after the accident, even when the physical repairs are complete. That can feel unfair, especially when the crash was not your fault. You deserve to understand whether that loss can still be part of your claim.
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 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 in Texas
Are you wondering how to file a diminishing value claim? You can file a Texas diminished value claim 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 bolster 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 first-party insurance claim or,
- 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 Texas 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.
Insurance Companies Often Hope Diminished Value Will Be Overlooked
The problem is that diminished value is easy for insurers to minimize when the paperwork is thin or the vehicle’s before-and-after value is not clearly documented. That is why repair invoices, dealer opinions, and valuation support can matter so much in a Texas diminished value claim. When the evidence is stronger, it becomes harder for the loss to be brushed aside. You should not have to guess at what your vehicle is truly worth after the crash.
Diminished Value Claims in Texas: Frequently Asked Questions
A diminished value claim in Texas is a claim for the loss in your vehicle’s market value after an accident. Even when repairs are completed, the car may still be worth less because it now carries an accident history.
Buyers often pay less for a previously wrecked vehicle because they worry about hidden damage, future reliability issues, and lower resale appeal. That market reaction is a major reason diminished value claims exist.
Texas diminished value claims are often discussed in three categories: inherent diminished value, immediate diminished value, and repair-related diminished value. The right approach depends on whether the vehicle has been repaired and why its value dropped.
Inherent diminished value refers to the loss in a vehicle’s market value that remains even after proper repairs. The car functions again, but the market still sees it as less desirable because of the accident history.
Immediate diminished value is the difference in what the vehicle was worth before the accident and what it was worth immediately after the accident, before repairs were made.
Repair-related diminished value focuses on the loss caused by incomplete or lower-quality repairs, replacement parts, or damage that still affects the vehicle after the shop work is done.
A Texas diminished value claim usually starts with gathering proof of value loss, such as vehicle valuations, dealership opinions, repair invoices, and market comparisons. The page also notes that people often use tools like Kelley Blue Book values and dealer valuations to support the claim.
A first-party diminished value claim is made through your own insurance coverage when your policy applies, while a third-party claim is made through the at-fault driver’s insurance when someone else caused the accident.
A denial does not always end the claim. The page explains that some denied Texas diminished value claims can still be appealed or pursued further, including through small claims court or other litigation depending on the situation.
If the insurer is undervaluing the vehicle, denying the claim, or making the process difficult, it is worth getting a quick legal review. The current page specifically recommends speaking with an experienced Texas car accident attorney about diminished value claims.
Are You Planning to File a Diminished Value Claim? Let our Texas Car Accident Lawyers Help You
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 in Texas as soon as possible. With a car accident 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 near me in Texas is to help you get the result you want. Whatever it takes to get you there, we will do it.
Check out our case results page to see how we have helped our clients in the past, then contact us today for your free consultation.
Where You Can Find Our Waco, TX Office
Michael Zimmerman
Michael was born in Houston, Texas. His education at Baylor and Texas State Universities earned him a Bachelor of Science degree in 1987. His major was in Biology with a Minor in Chemistry. He finished his legal education at Texas Southern University in 1990, earning a Juris Doctorate from Thurgood Marshall School of Law. He was admitted to the State Bar of Texas in 1990.
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