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. Diminished value claims in Texas are recoverable for third party claimants who are not at-fault and under your own insurance policies underinsured/uninsured motorist coverage if the person that was responsible for your damage was uninsured or didn’t carry sufficient liability limits to cover all of your damages.
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.
So how do Texas UM/UIM and third party diminished value claims work?
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 coverage. Uninsured/Underinsured Motorist (UM/UIM) 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.
Under a third party Texas Diminished Value Claim, if the accident was not your fault, you are entitled to file a diminished value claim against the responsible driver’s insurance company. Per the statute of limitations, you have up to two years from the date of loss to file your diminished value claim in Texas. The ideal time though is right after you get your vehicle repaired.
Diminished Value Claim Texas – Do I Qualify?
Diminished value claims are unique to each vehicle and accident and should be evaluated as such. However, the following list will provide some generalizations to help you determine if you are a good candidate to file a diminished value claim in Texas.
- Your vehicle is not leased. If you are leasing your vehicle you aren’t eligible, but if you own it or make payments, you qualify.
- You were not at fault for the accident.
- The person that caused the accident was uninsured or didn’t carry sufficient coverage and you have uninsured/underinsured motorist coverage on your policy you would qualify.
- This is the first accident the vehicle has ever been involved in (clean accident history).
Most insurance companies require you to submit documentation in support of your diminished value loss. To prove your claim, an expert will be necessary to conduct research and generate a USPAP compliant appraisal report. DVCHECK is a nationwide provider of diminished value appraisal reports that will help you document, demand, negotiate, and recover your car’s diminished value after a car accident.