In Fort Worth, Texas car accident lawyers take several steps to calculate your car’s diminished value after an accident. To properly calculate a vehicle’s diminished value, car accident lawyers use a mathematical equation. Lawyers use this calculation in addition to Texas laws regarding diminished value.
Texas Law On Diminished Value
In Texas, you can recover some damages for diminished value to your vehicle. As of now, the Texas Department of Insurance (TDI) does not require that drivers carry insurance to cover diminished value or that car insurance providers offer this protection.
However, you and your insurance company can certainly negotiate a favorable settlement that includes the cost of your car’s diminished value. Texas law requires that drivers must carry a minimum of $25,000 for property damage coverage when operating a motor vehicle on public roadways.
If you exceed the $25,000, you may be eligible to claim compensation for diminished value under your own underinsured/uninsured motorist coverage.
If you were in an accident that was not your fault, you can include diminished value as part of the compensation you seek from the at-fault driver’s insurance.
In such a case, you are eligible to claim that the other driver’s careless driving led to an unfair diminishment of value to your car. You can claim that this diminished value may cause you financial difficulty because you can’t sell your car for a fair price in the future.
Making A Diminished Value Claim In Texas
If you were in a car accident in Texas, you have two years to make a diminished value claim against the insurance company of the at-fault driver (a third-party claim).
To file a diminished value claim in Texas, a few things must be true:
- You must own the car (not lease it) and/or making payments.
- You must not be at fault for the accident.
- Your car must not have been in any other accidents.
- The other driver must be at fault, underinsured or uninsured, and unable to pay for the diminished value of your car with their property damage coverage.
- Your car must have lost value.
- Your car’s lost value must be assigned a dollar amount.
- The insurance company must allow the recovery of a diminished value claim.
After an accident, you should start by getting your vehicle repaired to as good of a condition as possible. Keep records of all expenses, estimates, and statements from the repair company so you can determine how much the repairs cost.
After repairs, insurance companies will calculate your car’s diminished value and you can write a demand letter asking for compensation for that loss of value. Seek guidance from a Texas personal injury lawyer from Patterson Law Group in preparing a demand.
Types Of Diminished Value Claims After a Car Accident
Calculating the diminished value of your car is a relatively simple process. It requires an understanding of your car’s value before the accident, your car’s value after the accident, and a record of where and how badly your car was damaged.
As soon as you purchase your car, the value will begin to diminish. This is partly due to the sale price being a bit higher than the “Blue Book” value so the dealership you bought from can make a profit.
Cars also lose value from basic wear and tear. In general, cars diminish in value at a rate of 15% to 20% every year. Smoking or denting can greatly diminish the value of any vehicle.
In addition to the diminished value inherent in driving a car, there are three main types of diminished value you can include in a diminished value calculation after an accident:
- Immediate Diminished Value. Immediate diminished value refers to the value of your car immediately after an accident and before any repairs. This type of diminished value is rarely used since insurance companies will usually pay for repairs to a vehicle, leaving you with no need to consider the worth of an unrepaired car.
- Inherent Diminished Value. Inherent diminished value refers to the damage to your car that remains after repairs. This diminished value is based on the fact that your car will never be worth as much again due to the crash. Even when you go to sell it, dealerships and individuals looking to buy will not be willing to pay as much for a car that was involved in an accident. This diminished value remains even after the car is repaired, and usually means the car was not severely damaged and is fully reparable. In most cases, this value will be the primary factor in determining diminished value amounts.
- Repair-related Diminished Value. Repair-related diminished value refers to the value of your car if repairs caused further damage or left it looking worse than it did before the accident. If repairs left the car with different paint colors or with after-market parts that don’t perform as well, your car will be worth a lot less to a potential buyer. In addition, it may sometimes be impossible for your car to be returned to its original condition (especially if it was a vintage or collectible vehicle, for example). Sometimes, parts for older vehicles simply can’t be replaced. This type of damage can be difficult to claim from a third party since it is technically the fault of the repair company. However, insurance companies are required to pick high-quality repair shops that will see your car is repaired as well as possible. If the insurance company fails to pay for adequate repairs, you can claim that resulting diminished value against them.
After taking into account the type of damage the car suffered, an insurance company will perform a calculation to determine the approximate diminished value you can claim.
In general, insurance companies will always pick the lowest possible amount that they can pay. Because of this, you should do your best to make your own calculations of your car’s diminished value to be sure you get what you deserve for it.
What Is A 17c Diminished Value Calculation Formula?
A 17C diminished value calculation formula is named for the clause in a Georgia court case (State Farm Automobile Insurance Company vs. Mabry) which set the precedent for this calculation.
Here are the basic steps of a 17C diminished value formula:
- Determine the pre-accident value of your car (you may use Kelly Blue Book or a site such as North America Datacom (NADA) to calculate this).
- Multiply the pre-accident value by .10 (10%) to determine the base loss value.
- Multiply the base loss value by a multiplier depending on how severely your vehicle was damaged:
- 1 for structure damage
- 0.75 for major panel or structure damage
- 0.50 for moderate panel or structure damage
- 0.25 for minor panel or structure damage
- 0.00 for no structural damage
- Multiply the result of this calculation by a number indicating the mileage of your car:
- 1 for miles between 0 and 19,999
- 0.80 for miles between 20,000 and 39,999
- 0.60 for miles between 40,000 and 59,999
- 0.40 for miles between 60,000 and 79,999
- 0.20 for miles between 80,000 and 99,999
- 0.00 for miles above 100,000
While this calculation is fairly straightforward, it does not necessarily lead to a fair diminished value. You need to know as much about your car’s value as possible.
Calculate the pre and post-accident values and calculate the difference. Speak to a personal injury lawyer and an official appraiser to get help understanding the true diminished value you can claim.
How Can A Personal Injury Lawyer Help Calculate Your Car’s Diminished Value?
Our personal injury lawyers at Patterson Law Group have 80+ years of combined experience working with car accident victims. We are experienced at fighting insurance companies to get the settlements their clients deserve.
If you have been in an accident and are worried about your car’s diminished value, don’t hesitate to call Patterson Law Group today.