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 and a hit and run with physical contact. You must file a police report as well. $250 deductible applies.
Underinsured Motorist Coverage for Diminished Value: Yes
Texas Small Claims Court Limit: $20,000, attorney representation and appeals are permitted
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 with 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 it were 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.
“Market value” means the amount that would be paid in cash by a willing buyer who desires to buy, but is not required to buy, to a willing seller who desires to sell, but is under no necessity of selling.
Texas law states that 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 and 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.
The Texas Department of Insurance has confirmed this in COMMISSIONER’S BULLETIN # B-0027-00 that states:
- An insurer also 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 is required to 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.
How to File a Diminished Value Claim in Texas
Step 1. Obtain proof of your car's diminished value.
The best way to prove your claim is to hire licensed, highly qualified, competent, and independent diminished value experts. The better the appraisal, the better the chance of the insurance company accepting the appraisal and paying the claim faster and for more money.
Step 2. Submit your documentation (diminished value appraisal) and demand letter for review.
The ideal time is right after you get your vehicle repaired. The sooner you file your diminished value claim, the better. Typically, if the accident wasn’t your fault, you would file a diminished value claim with the at-fault driver’s insurance company.
It’s covered under their property damage liability.
Step 3. Settle your claim.
The role of the claims adjuster is to negotiate the lowest possible settlement for the insurance company. They will either accept your claim, offer a lower settlement, or deny the claim.
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. If you have any questions, please call us at (850) 201-1950 or submit a request for a free estimate.