If you are unfamiliar with the phrase “diminished value” and how it relates to auto accidents and car wrecks, you are not alone. Diminished value is legalese for the reduced value of an automobile after it is involved in a collision.

If a vehicle is damaged in a crash, its resale value will decrease, meaning that the owner will get a lower trade-in offer when he or she tries to purchase a new vehicle. This reduced or “diminished value” will make it more difficult to finance a later vehicle purchase.

Most auto insurance policy holders living in the Houston area do not know that insurance companies will cover this diminished value in addition to payment for vehicle replacement. In fact, diminished value claims are such a well-kept secret that millions of dollars each year in potential claims are never filed.

Insurance agents are also not rushing to advertise the existence of diminished value claims. Often, unless a policy holder explicitly asks about diminished value claims, the insurance agent will never mention it. Even when a knowledgeable policy holder does know to ask about diminished value claims, the agent will lowball a settlement.

How Do I Know If I Have A Diminished Value Claim?

In the State of Texas, insurance policy holders may be entitled to a diminished value claim if the following criteria are met:

• The policy holder was involved in a car accident that was not his or her fault.
• The policy holder owns (not leases or rents) the vehicle (in some cases, owners of leased vehicles may still be able to recover diminished value. Call our offices for more information).
• Either the other vehicle’s owner’s insurance policy must cover the cost of repairs to your vehicle or you have uninsured motorist coverage.
• The vehicle cannot have a prior accident history.
• While not a requirement, vehicles with high mileage will have a more limited potential recovery. further, unless your car is fairly new, a diminished value claim is extremely difficult and may not be worth making such a claim.

Under Texas law, you have two years from the date of the wreck to file a claim for diminished value. Waiting too long to file will forfeit your right to a recovery.

Should I Hire A Lawyer?

If your vehicle has been damaged in a car wreck or auto accident that was not your fault within the last two years and you have not filed a diminished value claim, you are leaving money on the table.

Hiring a skilled attorney to advocate for your rights is the best way to preserve your right to recover under your diminished value insurance policy. After all, as a policy holder, you pay expensive premiums and should be able to access the full coverage amount under that policy.

It is often risky to try to settle with an insurance company without representation. Simply knowing that coverage exists does not guarantee that insurance companies will pay out the maximum recovery an attorney could negotiate.

While Texas law prohibits insurance adjusters from pressuring policy holders into releasing their claims entirely, lowball first offers are common. Also, diminished recovery claims are by no means guaranteed.

Insurance policies are very technical documents that follow strict rules of legal construction. Going it alone is not the smart play. If you believe you may have a diminished value claim, our attorneys will help you investigate your legal options.