TexasDiminishedValue.com is a resource site to help consumers learn about diminished value (also known as diminution in value) in the state of Texas. We hope you’ll find the information listed here to be helpful and informative. Good luck in your recovery!!
What is diminished value? Inherent diminished value is the loss of value associated with a vehicles damage history, and it assumes optimal repair. In other words, even if your car was repaired to perfection, that fact that it was in an accident means that most consumers are not willing to pay as much for it as a car with no prior damage.
Although the law varies somewhat according to state, Texas follows the majority of states and prohibits diminished value recovery in first party claims, but allows recovery in third party claims. This means that when a vehicle is damaged by a third party, the owner can pursue the at-fault party for the loss of value caused by the third party’s negligence.
In Commissioners Bulletin B-0027-00, the Insurance Commissioner of Texas stated that in addition to recovery from the at fault driver’s insurance company, the vehicle owner can also recover against the vehicle owner’s uninsured motorist coverage if the at-fault driver lacks insurance. The bulletin reads in pertinent part:
“The position of the Department is that an insurer is not obligated to pay a first party claimant for diminished value when an automobile is completely repaired to its pre-damage condition. The language of the insurance policy does not require payment for, or refer to, diminished value.
This bulletin is not intended to preclude the use of loss of market value as a measure that an insurer and first party claimant may use to settle other disputes. For example, if an automobile was repaired properly but the vehicle still does not function as it did before the accident, the insurer and policyholder may agree to use loss of the automobile´s market value as a measure of damages to settle the dispute.
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.”
Who can help me with a Texas Diminished Value?
Although it seems like the inherent loss of value of your vehicle should be easy to recover, anyone who has ever attempted to collect diminished value in Texas can tell you that it actually is very difficult and that insurance companies typically offer low settlements or none at all.
First, because diminished value is not compensable as a first party claim, there is virtually no chance that an insurance company will be liable for bad faith and thus no down side for them not to pay. (An insurance company found to be in bad faith may be found liable for extraordinary damages because of the public policy against bad faith behavior). Second, because the damage amounts tend not to be very large, most of the time lawyers will not take diminished value cases on a contingency basis. Insurance companies know this and so they know that statistically they are better off denying the claim than paying it because for every claim that they are forced to pay, the thousands that they don’t pay result in a veritable windfall for them.
What do you do if you don’t want the insurance companies to win? What do you do if you want to collect what you are legally entitled to collect? There is good news. Even against these types of odds, there are still ways to recover your diminished value claim in Texas.