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Client Review

“I had my first auto accident, and my car was totaled. My insurance company was lowballing the payout. Richard and his team did an independent appraisal of my wreck and gave a lot of value. Insurance companies are profitable because they will pay out the bare amount. These independent appraisers allow regular people to get an actual fair market value.” James O.

Texas Diminished Value Appraisal

• A diminished value appraisal in Texas is an important document for any car owner since Texas is a diminished value state. This appraisal is crucial because a vehicle’s worth typically decreases after an accident, even if it has been fully repaired. In Texas, the law allows vehicle owners to file a claim for this diminished value against the at-fault person’s insurance company.Our appraisers at Collision Claims are led by a thirty-year veteran in the industry. We’ve appraised thousands of vehicles over the years which have helped our customers receive the compensation they deserve. If you’ve been involved in an accident and need a diminished value appraisal for your car, you’ve come to the right place. We even offer a Free diminished value claim review. 
  

  What is a Diminished Value Claim?

  A diminished value claim is a compensation claim made by a vehicle owner for the reduced market value of their vehicle after it has been damaged in a car accident, regardless of the repairs made to restore it to its original condition.

  The rationale behind this claim is that potential future buyers are likely to offer a lower price for your vehicle with a history of damage, even if it has been fully repaired. The diminished value claim seeks to compensate you for this potential loss in the vehicle’s resale value.

  What is a Diminished Value Appraisal?

  A diminished value appraisal in Texas refers to an unbiased assessment by an experienced vehicle appraiser of a vehicle’s value after it has been involved in an accident and subsequently repaired. This type of appraisal is needed to make a diminished value claim.

  What’s Included in a Diminished Value Appraisal?

  A diminished value appraisal is a comprehensive evaluation of your vehicle’s worth after it has sustained damage and undergone subsequent repairs. This assessment is conducted by a professional car appraiser who takes into account various factors such as the extent and nature of the damage, the repair process, the make and model of your vehicle, its pre-accident condition, and its market value before the accident.

  After making their assessment, the appraiser will provide you with an expert opinion report of the vehicle’s value which is then used as the basis for a diminished value claim.

  The appraisal report provides a detailed analysis of the reduction in your vehicle’s value, which is necessary for insurance claims or potential resale. This is an essential document if you’re seeking to recover the lost value from insurance companies, banks, credit unions, or potential buyers.

  There are many different types of appraisals with various use cases.

  Why do I need a Diminished Car Value Appraisal? (Use Case)

  This appraisal is not only crucial for insurance claims but also if you decide to sell your vehicle in the future. The appraisal provides a concrete, professional evaluation of the car’s post-accident value, which can significantly influence the amount of compensation you receive from insurance companies. Without this appraisal, you may be inadequately compensated, leading to financial losses. Therefore, obtaining a Diminished Car Value Appraisal is a prudent step to safeguard your investment in your vehicle.

  Several conditions must be met to qualify for a diminished value claim:

  • The auto accident you were involved in wasn’t your fault 
  • The accident was caused by another driver. In other words, the damage to your vehicle was not caused by something other than a collision.
  • You are still within the statute of limitations. In Texas, this is two years from the date of the loss.

  Car Appraisal for Diminished Value Scenario

  Suppose you own a car that was in pristine condition but got involved in an accident. The other driver’s insurance company offers you $900 and instead of taking that offer, you decide to get a car appraisal for diminished value.

  The appraisal shows your vehicle’s market value dropped by $5,000 due to the accident. This amount is known as the diminished value. You can present this to the other driver’s insurance company as proof of the value instead of the amount they originally offered.

  Even though the car may look and run as it did before the accident, its market value has dropped by $5,000 when compared to a similar car that has never been in an accident.

  How Diminished Value Will Affect You

  Diminished value brings several issues with it, including the following:

  • A rational buyer will not pay the same amount for your car if it has been involved in an accident.
  • You must disclose that your car has been involved in an accident to potential buyers.
  • The Carfax report will show the accident history.
  • Since your car was involved in an accident, it’s not eligible to be classified as a certified pre-owned vehicle.

  Legal Framework in Texas

  In the state of Texas, the laws and regulations about diminished value appraisals are primarily governed by the Texas Department of Insurance.

  The state acknowledges the right of the not-at-fault party to file a diminished value claim if their vehicle has suffered significant damage that has consequently reduced its market value.

  The Texas Department of Insurance stipulates that insurance companies are obligated to settle these claims in a fair and timely manner.

  However, there is a statute of limitations for filing diminished value claims in Texas. According to the Texas Civil Practice & Remedies Code section 16.003, a claimant has a period of two years from the date of the accident to file a claim. Failure to adhere to this timeframe may result in the insurance claim being dismissed.

  TEXAS DIMINISHED VALUE CLAIM INFO

  • Texas Statute Of Limitations: 2 Years
  • Uninsured Motorist Coverage: YES
  • Diminished Value For At Fault Party: NO

  Insurance Policies and Diminished Value Appraisals

  Most insurance policies do not cover diminished value for the policyholder. However, the not-at-fault party can make a diminished value claim directly to the at-fault persons insurance company. 

  This process typically involves obtaining a professional appraisal to accurately assess the vehicle’s post-repair market value.

  Texas Diminished Value Appraisal Process

  The appraisal process in Texas begins with the selection of a qualified appraiser. The appraiser then conducts a thorough review of your car, noting its overall condition, age, mileage, and damage.

  This information is then used to determine how the vehicle marketplace will treat your vehicle compared to other vehicles that do not have a damage history to determine the loss of value. The final step involves compiling a comprehensive appraisal report, which is crucial as it provides a detailed account of the car’s value and the methods used to determine it.

  In Texas, the calculation of a vehicle’s diminished value is particularly important in insurance claims, as it directly impacts the compensation amount.

  2 Types of Texas Diminished Value Claims

  Repair-related Diminished Value – is the loss of value due to the inability to perfectly repair the vehicle. Meaning that the car is now worth less after repairs than it was before the wreck.

  Inherent Diminished Value – This is the most widely recognized and accepted form of Diminished Value. This assumes that the best repair quality has been achieved and is defined as the amount by which the resale value of a repaired vehicle has been reduced due to the accident. 

  Effects of Fault and Insurance Coverage

  In Texas, the party at fault is typically held responsible for the diminished value, which is the reduction in a vehicle’s market value post-accident.

  Underinsured or Uninsured Motorist Coverage

  If the at-fault party is uninsured or underinsured, it can complicate the claim process as they may not have the financial capacity to cover the diminished value. This situation often leads to filing your diminished value claim with your own insurance company through the uninsured or underinsured motorist coverage.

  The type and extent of insurance coverage can significantly impact the diminished value claim process. Most liability insurance policies cover diminished value claims, making the claim process smoother and more straightforward. However, in cases where the coverage is limited or non-existent, the claim process can become more complex and contentious, since you are making the claim through your own insurance policy. 

  How to File a Diminished Value Claim in Texas

  1. Ensure you qualify for a claim.
  2. Obtain a professional appraisal of your vehicle’s diminished value. This appraisal should be conducted by an experienced appraiser who can provide a comprehensive report detailing the diminished value.
  3. Submit a formal claim letter to the at-fault party’s insurance company, attaching the appraisal report and any other relevant documentation such as repair bills and photographs of the vehicle.

  Evidence is crucial in a diminished value claim, so it’s important to gather as much as possible to support your claim.

  Diminished Value Appraisal Services in Texas

  Don’t let the insurance company tell you. Ask The Experts at Collision Claim Associates, Inc. We are professional vehicle appraisers who will provide you with the documentation you need to get the compensation you’re entitled to.

  FAQs

  Do I have Diminished Value?

  Probably, if the vehicle has no previous or significant damage. To find out for sure fill out our  Free Diminished Value Claim Review form.

  How do I collect on Diminished Value?

  You can collect by providing the insurance company with a professionally prepared Diminished Value report that details the extent of vehicle’s damage and the resulting diminished value.

  Will I need help to settle my Diminished Value claim?

  Yes. The process of filing and negotiating a diminished value claim can be complex, involving intricate knowledge of insurance laws and procedures, as well as a clear understanding of the automotive market. An experienced professional, such as your appraiser or a claims consultant, can provide invaluable guidance, ensuring that all necessary steps are correctly followed and that the claim is accurately calculated. This can significantly increase your chances of receiving a fair settlement.

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