What Are Diminished Value Claims in Texas?
Property damage claims can be complicated, especially diminished value claims. Let’s say you have an auto that suffered damage in an auto wreck. You repaired the vehicle to its prior condition. In this case, you may believe that the insurer should pay you for the auto’s diminished value. This amount refers to cases where the policyholder claims that their auto’s market value is less after the repair than it was before the vehicle sustained damage. You can benefit from the help of a car accident lawyer for both injury and property-related claims.
How Texas Views Diminished Value
Texas insurance laws state that an auto insurance company’s contract liability for first-party claims for comprehensive or collision damage is the lesser of the following three options minus the deductible.
- The actual cash value of a damaged or stolen auto.
- The amount needed to replace or repair the car with a similar car or parts.
- The amount included in a policy’s declarations.
Paying the actual cash value for the auto applies when the insurance company declares an auto a total loss.
If the insurer decides to repair or replace the vehicle, they are obligated to pay the total cost required for the repair or replacement.
As a result, the TDI does not support the stance that it owes a policyholder for diminished value if the car has been totally repaired to its former pre-damaged state. The language in the policy normally does not require payment or reference the term “diminished value.”
However, there are exceptions to the rule. For example, if the car was repaired fully but the auto does not run as it did before the accident, the policyholder and insurance company may agree to figure this loss into the car’s market value as a measure for paying for damages.
An insurance company may also pay a third-party claimant for a decrease in market value for a liability claim against a policyholder, regardless of the degree of the restoration. This may also apply to a first-party claimant who files an uninsured/underinsured claim, regardless of the comprehensiveness of the repair.
Information Regarding Diminished Value Claims
If you’re involved in an accident with an at-fault party, you’re entitled to receive compensation for the diminished value of your vehicle.
This is because, in this case, the third party is legally obligated to make you “whole” again or to repair your car to its pre-accident fair market value. Therefore, the insurance company of the driver who is at fault is obligated to repair the auto and pay for the difference between the pre-accident resale value and value after the repair – an expense that the liability portion of a policy covers.
Types of Diminished Value Claims
You have three options to follow if you believe you’re owed the diminished value of your car. You can submit a repair-related claim, an immediate claim, or base your claim on the car’s inherent diminished value.
Repair-Related Claims
If the claim is repair-related, you can ask for the value based on the fact that the monetary worth of the vehicle is less than what it was before the repair.
Immediate Diminished Value Claims
Immediate diminished value refers to the resale value of the auto before the wreck and its resale value after the damage before the car’s repair. Immediate diminished value also defines the loss of value caused by the insurance company’s direct involvement in adjusting the claim. This may happen if the repairs were inadequate, which left the vehicle in less than optimal condition.
Inherent Legal Claims
Inherent diminished value is more widely accepted. This form of diminished value defines the repair quality of the car when it’s at its best. This is shown by the reduction of the resale value of the repaired auto. Experts also use this form of diminished value to include supplemental forms of diminished value to the total amount claimed.
Contact a Diminished Value Attorney Right Away
While insurers have one stance about diminished value–to save money–litigators can also help you receive the difference between the resale value and the loss you assume before or after a wrecked car has been repaired. Speak to a diminished value attorney to get the help you need to settle this type of dispute immediately. Contact the Holladay Law Firm at 1-800-900-3319 today.