Can You Recover Your Vehicle’s Pre-Accident Value? Navigating a Diminished Value Claim

Most car owners realize their vehicles start depreciating as soon as they leave the dealership. However, there can be exceptions. Some antique cars can increase in value, regardless of whether they have a few hundred or several thousand miles on the odometer.

But, what about your vehicle’s value after an accident? Is there a way you can recover its pre-accident value? Understanding inherent diminished value is key if you’re planning to include this damage in an accident claim.

What is a Diminished Value Claim?

A diminished value claim isn’t a separate legal action after an accident. Instead, it’s always part of a personal injury claim. You can’t file multiple claims for damages caused by the same accident.

So, your personal injury claim may list losses like medical expenses and vehicle repair costs. Lost income is another common damage. If you want to recover the vehicle’s monetary worth before the accident, you’ll also list its diminished value.

So, what are you hoping to recover with a damage value claim? You’re trying to recover any loss you may suffer when trying to sell an accident-damaged vehicle. Essentially, you take the vehicle’s estimated worth before the accident and its current value. The difference between the two numbers is the amount you list as your reduced value.

Thankfully, figuring out the estimated value of a vehicle is relatively easy. Most insurance companies and auto dealerships refer to a current copy of the Kelley Blue Book. The vehicle's Blue Book value isn’t necessarily what you’ll receive, but it gives you a starting asking price. From there, you can haggle with potential buyers until you reach an acceptable selling price.

While determining your vehicle’s value pre and post-accident is relatively easy, receiving compensation is often tricky. As the plaintiff in the personal injury claim, the burden of proof is on you, and this means you must prove your vehicle’s value both before and after the collision.

Requirements for Filing a Diminished Value Claim in Texas

Texas is an at-fault state so you’re going to file your diminished value claim against the driver responsible for causing the accident. If the accident is your fault, you turn to your insurance provider.

A quick note, Texas, like most states, doesn’t require drivers to carry diminished value insurance. The state only requires all drivers to carry liability insurance, and this type of insurance only covers damages to the other driver’s vehicle. Your property damage isn’t covered by a liability policy.

If you have full coverage, there’s a chance your insurance provider will reimburse you for your vehicle’s diminished value. However, you still need to prove its value before the accident.

What if the at-fault driver is only carrying the state’s minimum insurance requirements? Texas only requires drivers to have $25,000 in property damage coverage. If your diminished value claim exceeds the policy’s cap, you’re probably going to need to file a lawsuit against the at-fault driver, which is a lawsuit against the driver and not their insurance provider.

Not everyone can include diminished value in a personal injury claim. The Lone Star state has a few requirements you must meet. If you can’t meet all of the following requirements, there’s a good chance you can’t recover your car’s lost value:

• The vehicle can’t be under a lease agreement. You must either outright own the vehicle or be making recorded payments. A payment record can be anything from a financial statement from your bank to payment stubs.
• You can’t be at fault for the accident. However, this only applies if you’re filing a third-party insurance claim. This is a claim against the other involved driver’s insurance company. You can file a diminished value claim with your insurance company, even if you’re liable for the accident. Whether your claim is approved typically depends on a few factors like your type of auto insurance policy.
• Your vehicle can’t have damage from other accidents. To file a diminished value claim, this must be your vehicle’s first accident. Yes, even a minor fender bender counts if you reported the accident and/or filed an insurance claim for the minimal damage.
• The vehicle must lose resale value after the accident. If the resale value remains the same, you don’t have any losses to list in the claim.
• You must be able to list a specific value amount. This is the monetary loss you’ll suffer when selling the damaged vehicle. If you can’t name a specific dollar amount, the insurance company will deny your claim.

Something else that you should consider is if the insurance company accepts diminished value claims. Not all insurance providers cover this loss, even when you’re not liable for the accident. Don’t forget about the statute of limitations. This is the time you have to file a claim after an accident. In Texas, you have two years to file a claim and the clock starts ticking on the accident date.

Proving a Diminished Value Claim

Before you can receive compensation for your vehicle’s lost value, you need to submit proof. This type of claim requires more than your accident report. Your accident report is a crucial piece of evidence in a personal injury claim. The report proves the accident happened, and it also generally names the liable driver.

Remember, liability can impact a diminished value claim. Texas is also a comparative negligence state and this can affect your compensation amount. If you’re partially liable for the car collision, your compensation is reduced by your percentage of guilt. This may mean you don’t receive the total lost value of your car.

How can you prove your vehicle’s pre-accident value? Along with the Kelley Blue Book estimate, any estimates, repair bills, and receipts from certified automotive shops can help support your diminished value claim.

Proving a diminished value claim is rarely easy. Insurance companies will often look for ways to deny or at least reduce your claim’s value. To help ensure you receive fair compensation, including your vehicle’s lost sale value, it’s a good idea to work with an experienced personal injury attorney.