Meaning of the Two Numbers in Texas
There are two numbers to know. The market range is the amount buyers would probably subtract from your car's price. The 17c number comes from a short formula that many insurers use when they make a first offer. Texas does not have its own formula. In Bulletin B-0027-00, the Texas Department of Insurance told insurers that even a full repair may not end what they owe the other driver for lost market value. The bulletin does not give a way to calculate that loss. Treat the adjuster's number as a starting offer and respond with your own market range.
The law firm Matthiesen, Wickert & Lehrer checked the laws of every state in a 50-state survey. It found no Texas court decision that clearly permits a diminished value claim against the at-fault driver. That means proof is important. A market figure supported by an independent appraisal counts for more than a table does. The 17c formula page lists both tables of multipliers. Those are the numbers that 17c multiplies by.
Presenting Your Estimate to a Texas Insurer
You file your claim with the insurance company that covers the driver who caused the crash.
- Not your own collision coverage. In 2003 the Texas Supreme Court ruled in American Manufacturers Mutual Insurance Co. v. Schaefer that your own collision coverage pays only for the repairs. It does not pay for the lost value.
- If the other driver had little or no insurance. Your uninsured or underinsured motorist coverage may owe you the lost value, the bulletin says.
- Your deadline. You have two years to file a lawsuit, under Section 16.003 of the Texas Civil Practice and Remedies Code.
- Your share of the blame. Texas bars any payment from the other driver once your share of the fault reaches 51 percent.
Is It Worth Filing a Claim in Texas, and When Should You Skip One?
A claim usually pays off if the other driver caused the crash and your car is fairly new, has low miles and suffered real damage. Kelley Blue Book says your chance of getting paid goes up the newer the car is and the fewer miles it has.
In these cases, a claim may not be worth your time:
- The repair was minor. A study in the NAIC Journal of Insurance Regulation found that the loss often comes to about 10% to 20% of the repair bill. That means a $2,000 repair may mean a loss of only $200 to $400.
- The car is old and has high miles. It may have almost no extra value left to lose.
- The car was a total loss. There is no repaired car left to lose resale value.
- You caused the crash. Your own collision coverage pays only for the repair.
An independent appraisal usually costs $300 to $600. This is a written report of the car's value from a car appraiser. Pay for one when the likely loss is clearly larger than the fee.
Making a Diminished Value Claim in Texas: 5 Steps
- Complete the repairs and save your paperwork. Hold on to the repair estimate, the shop's final invoice and photos of the damage from before the repair.
- Gather your numbers. Fill out the free estimate, then get a vehicle history report, such as Carfax, that shows the crash.
- Hire an appraiser if the loss is large. The appraiser inspects the repaired car and writes down how much value it lost. In Texas, no court rule sets the amount, so that report is your strongest proof.
- Make your demand in writing. Send it to the insurer of the driver who caused the crash, or to your uninsured motorist coverage if that driver had no insurance. Include the estimate, the repair invoice, the photos, the vehicle history report and any appraisal. Our demand letter, a short letter that states the amount you want, lets you fill in your figure. Keep a copy of the letter.
- Push back on a low offer. Reply in writing and refer to Bulletin B-0027-00. If the claim gets stuck, file a complaint with the Texas Department of Insurance, or take your case to justice court, the Texas small claims court, which handles claims up to $20,000. You must sue within two years.