Does a vehicle have an age limit of which you can claim diminished value?

[MikeAW2010]

What is the name of your state? Texas

I was involved in a rear end collision in my 2017 Camaro SS and it caused about $8k worth of damage. Prior to the accident my vehicle was worth about $29k (with the inflated market accounted for as well). After the accident I'm getting estimates of about $21-22k which is a significant loss. I contacted the at-fault parties insurance company and they told me the vehicle has to be 3 years old or newer to submit a claim and I didn't see anything like that in the Texas law. I did see that you have a 2 year period of which you can file the claim after the accident.. ..but does this sound like the insurance company trying to get out of paying? What are my options?

 

[PayrollHRGuy]

There is no mention of the age of the vehicle I can find.

Read through this. https://www.tdi.texas.gov/bulletins/2000/b-0027-0.html

You may have to not settle with the other party's insurance and sue them.

 

[adjusterjack]

I was involved in a rear end collision in my 2017 Camaro SS and it caused about $8k worth of damage. Prior to the accident my vehicle was worth about $29k (with the inflated market accounted for as well). After the accident I'm getting estimates of about $21-22k which is a significant loss.

Where are you getting those estimates from? If from a dealer they are BS.

See Page 22 of the following document for an explanation of the position of Texas courts on diminished value.

DIMINUTION OF VALUE IN ALL 50 STATES (00165375).DOC (mwl-law.com)

does this sound like the insurance company trying to get out of paying?

That's exactly what's happening. What you have to understand is that the other driver's insurance company is not your insurance company and owes you nothing until a court of law says so and says how much.

Until then they can say whatever they want and deny your claim for diminished value. If you disagree you will have to sue for it.

There is no limit on the age of the car. It should be obvious, however, that the older a car gets the less any diminished value becomes and seldom worth the cost of litigation.

In your case, don't count on getting any additional money beyond the cost of repairs just due to the stigma of the car having been in an accident. Texas case decisions don't appear to allow it.

You can look up the case decisions on Google Scholar. You can also search for diminished value and read other case decisions that address the issue.

Google Scholar

To illustrate the difficulty you face in proving diminished value, especially in Texas, here are two diametrically opposing viewpoints of two attorneys.

Attorney 1:

In my view, diminished value damages are completely speculative and improper. You don't know if you'll ever sell your vehicle. It might get totaled in another accident. It might get destroyed in a fire. If you do sell it, you don't know when you'll sell it. You also don't know if the person to whom you sell it will make an effort to research the car's accident history. You also don't know if your ultimate sale price is based on market conditions, the buyer's negotiating skill, or your desperate need for money. Accordingly, giving you something based on "diminished value" could amount to compensating you for damages you may never suffer or grossly overcompensating you.

Attorney 2:

If a car had a scratch on it because of an accident, it will have a lower value because of it and the damaged owner is clearly entitled to compensation for that damage. You might say, that scratch can be repaired, and that’s true. A car owner also gets compensation for damage done to a car that puts it beyond repair, as well. So what is the difference here: if the owner has suffered a loss in value, repairable or not, he ought to be entitled to compensation for that. Saying that the diminished value is too speculative for the reasons he gave doesn't fly because cars can be valued given their history and the loss determined with reasonable accuracy. It's done all the time. Cars with salvage titles, for example, are worth less than those without such titles even if they appear otherwise to be in the same condition, and that difference can be computed. Same with the diminished value claims here. I agree that the amount of diminished value in many cases is not much, but to the extent it does exist, it ought to be part of the compensation owed.

You are free to sue in small claims court if you like. You will need to pay an expert to testify in court and you don't get that money back.

I did see that you have a 2 year period of which you can file the claim after the accident..

It's two years to file a lawsuit, not file a claim. You can file the claim any time you want to but if you miss the deadline for filing a lawsuit, it's all over.

Bottom line: Keep your car for another 10 years and the accident history won't make much difference in what you get for it.

 

[PayrollHRGuy]

I did see that you have a 2 year period of which you can file the claim after the accident..

Another thing to remember is that when you take the money to fix the car you will be required to sign a waiver that says that's all the other party owes you.

 

[MikeAW2010]

Another thing to remember is that when you take the money to fix the car you will be required to sign a waiver that says that's all the other party owes you.

Noted. They sent the check to the body shop and not me and I didn’t sign any forms, but since we are on subject do you think it is worth it for me to pursue a diminished value case or should I let it go? How much would I likely spend on litigation and that money is irrecoverable (comes out of the settlement) right?

Also if I do not like their settlement offer, could I submit the claim through my own policy and pay my deductible? The deductible would be recovered right?

 

[LdiJ]

Noted. They sent the check to the body shop and not me and I didn’t sign any forms, but since we are on subject do you think it is worth it for me to pursue a diminished value case or should I let it go? How much would I likely spend on litigation and that money is irrecoverable (comes out of the settlement) right?

Also if I do not like their settlement offer, could I submit the claim through my own policy and pay my deductible? The deductible would be recovered right?

You will want to ask your own insurance company about that. However, I suspect that they are no fonder of diminished value claims than the other guy's insurance company.

 

[doucar]

Also if I do not like their settlement offer, could I submit the claim through my own policy and pay my deductible? The deductible would be recovered right?
Not if they have repaired you car then there would be nothing to turn over to your insurance company. If you are talking about personal injury, that would be another matter, but it would not be handled by your insurance company.

 

[adjusterjack]

Your car is getting repaired so all we are talking about is a diminished value claim. As I explained earlier, diminished value is not covered by your own policy. In my sample of a Texas auto policy it is specifically excluded under Damage to Your Auto - Exclusions - 18. Loss to your covered auto, non-owned auto, or trailer, for diminution in value.

Read your policy.

Even if it's not there, Texas courts have routinely ruled that a first party insurance company has no obligation to pay for diminished value.

Texas courts have refused to allow recovery of diminution in value and have stated that “[w]here an insurer has fully, completely, and adequately ‘repaired or replaced the property with other of like kind and quality’ any reduction in market value of the vehicle due to factors that are not subject to repair or replacement cannot be deemed a component part of the cost of repair or replacement.” American Manufacturers Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154 (Tex. 2003).
The Texas Department of Insurance Bulletin B-0027-00 (2000) has also held: “The position of the Department is that an insurer is not obligated to pay a first party claimant for diminished value when an automobile is completely repaired to its pre-damage condition. The language of the insurance policy does not require payment for, or refer to, diminished value.”
A vehicle’s diminution in market value due to additional mileage and the marketplace perception that a fully repaired vehicle was inferior was not part of the insurer’s obligation to repair the vehicle after a theft under the policy. Because the vehicle was fully repaired, the insurer was not required to pay its inherent diminished value, i.e., the difference between the value before the loss and after repair. Where an insurer has fully, completely, and adequately repaired or replaced the property with other of like kind and quality, any reduction in market value of the vehicle due to factors that are not subject to “repair or replacement” cannot be deemed a component part of the cost of repair or replacement. Carlton v. Trinity Universal Ins. Co., 32 S.W.3d 454 (Tex. App. 2000).

since we are on subject do you think it is worth it for me to pursue a diminished value case or should I let it go?

That's up to you to decide. As far as cost there are three options:

1 - File suit, no lawyer, no expert, just whatever evidence you can come up with on your own. You'll only pay court fees.
2 - File suit, pay an expert up front. You won't get that fee back. So hope you get enough of a judgment to cover it and leave some for you.
3 - File suit, pay an expert up front, pay a lawyer up front. Lawyers don't take those kinds of cases on a contingency so you could be out several thousands of dollars.

Texas allows attorneys in justice courts so you'll be going up against an insurance company's attorney and it won't be his/her first rodeo.

That being said, couldn't hurt to talk to an attorney about it and review your options.

Understand that Texas courts don't think much of diminished value claims.

No court decisions specifically allowing for recovery diminution in value of damaged vehicle in a third-party claim in addition to cost of repair to damaged vehicle. In action for damage to a vehicle, owner or subrogated insurer may sue for either diminution of market value or cost of repair to damaged vehicle. Jones v. Wallingsford, 921 S.W.2d 463 (Tex. App. 1996) (Note this case concerns Immediate Diminished Value rather than Inherent Diminished Value.)
A plaintiff whose property has not been destroyed may recover either (1) market value measured by difference in immediate preinjury value of property and immediate post-injury value before repairs, or (2) cost-of-repair and loss-of-use damages, including lost profits, but recovery of both remedies constitutes a double recovery. Texas Farm Bureau Mut. Ins. Co. v. Wilde, 385 S.W.3d 733 (Tex. App. 2012) abrogated on other grounds by J & D Towing, LLC v. Am. Alternative Ins. Corp., 478 S.W.3d 649 (Tex. 2016). However, there are cases allowing for recovery of diminution in value in other settings. Royce Homes, L.P. v. Humphrey, 244 S.W.3d 570 (Tex. App., 2008) (water damage to new home under construction), Ludt v. McCollum, 762 S.W.2d 575 (Tex. 1988); Terminix Int’l, Inc. v. Lucci, 670 S.W.2d 657 (Tex. App. 1984) (case involved permanent reduction to home due to foundation problems. Court held that an award of diminished value is recoverable in addition to costs of repair, assuming the permanent reduction in value refers to that reduction occurring even after repairs are made). In Texas, residual damages to market value of real estate are referred to as “stigma damages.” Houston Unlimited, Inc. Metal Processing v. Mel Acres Ranch, 443 S.W.3d 820 (Tex. 2014); see also, Ludt v. McCollum, 762 S.W.2d 575 (Tex. 1988). Texas law is clear that no double recoveries are allowed. Under certain circumstances, a plaintiff may recover for both diminution in value and cost of repairs, if there is no double recovery. Diminution in value does not duplicate cost of repairs if the diminution is based on a comparison of original value of property and value after repairs are made. Parkway Co. v. Woodruff, 901 S.W.2d 434, 441 (Tex. 1995).
Note: Texas Department of Insurance Bulletin B-0027-00 states—without providing any authority or precedent—that “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.” It doesn’t apply to vehicle that is a total loss

Italicized paragraphs are quoted from Page 22 of:

DIMINUTION OF VALUE IN ALL 50 STATES (00165375).DOC (mwl-law.com)


Were you injured?

 

[MikeAW2010]

I wouldn't quite say injured but they did hit me at about 35 - 40 MPH while I was sitting at a stop light. The airbags did not deploy but I had to go to a Chiropractor. I'm unsure if the law defines this as an injury or not though.

I have had previous chronic back issues so I'm unsure how they will handle the medical aspect of this, but I was not seeing a chiropractor at the time of the accident.

 

[Zigner]

I wouldn't quite say injured but they did hit me at about 35 - 40 MPH while I was sitting at a stop light. The airbags did not deploy but I had to go to a Chiropractor. I'm unsure if the law defines this as an injury or not though.

I have had previous chronic back issues so I'm unsure how they will handle the medical aspect of this, but I was not seeing a chiropractor at the time of the accident.

You should speak to an attorney. You may have a viable claim against the other driver.

 

[PayrollHRGuy]

The airbags did not deploy

That is normal in a rear collision.

 

[MikeAW2010]

You should speak to an attorney. You may have a viable claim against the other driver.

Noted, I really try to avoid going the attorney route because I know how long and drawn out the court process can be and I'm juggling alot as is but if I have to then I have to. I have a question though, Should I only go for an attorney if their insurance does not pay my medical claim or the full extent of the claim or should I just get one right now?

 

[Zigner]

Noted, I really try to avoid going the attorney route because I know how long and drawn out the court process can be and I'm juggling alot as is but if I have to then I have to. I have a question though, Should I only go for an attorney if their insurance does not pay my medical claim or the full extent of the claim or should I just get one right now?

I'm not the one who was involved in the accident, so what I am saying is just conjecture. At this point, you were involved in an accident in which the other party caused injury to you. You will be lucky if the other party's insurance company just rolls over and writes you a check to cover what you feel your injuries are worth. They may do that, but it's unlikely. On the flip-side, you may be happy to just have your co-pays and/or deductible covered with no additional amount paid to you. That's up to you, and if that's the case, then you probably won't even need an attorney.

I was involved in an accident several years ago. I felt pain the following day, but it wasn't enough to see a doctor about (although, a chiropractor may have reduced my symptoms). I didn't ask the other insurance company for anything by compensation for the damage to my car. The point of my little story is that it's really up to you if it's even worth pursuing.

 

[MikeAW2010]

If I went through my medical insurance wouldn't they deny the claim because it was caused by an insured motorists accident?

 

[Zigner]

If I went through my medical insurance wouldn't they deny the claim because it was caused by an insured motorists accident?

I'll say this upfront: I am not familiar with how Texas law handles this. In MY state (California), you could use your insurance and your insurance would have a lien against anything you recover from the other party. You would have to reimburse your insurance company out of anything you receive from the other party.