How to submit a diminished value claim
Yesterday I discussed how to evaluate your diminished value claim. Today we’ll discuss how to assemble and submit your diminished value claim to the insurance company. You can hire a lawyer, like myself, to assemble your claim and negotiate with the insurance company. However, unless your car is a luxury vehicle or you also have injury claims to deal with, it may not be worth your money to hire an attorney. Instead, with a few phone calls and letters you should reach a reasonable settlement of your diminished value claim.
Before bringing up your diminished value claim you need to know the basis and evidence supporting your claim. That should be either a report from a diminished value appraiser or your market research that combines trade in appraisals, prior sales and current offers on similar vehicles in your market (discussed in the last post). Without a legitimate basis for your request, you will likely walk away with very little of what you deserve.
You might as well begin your discussion of your diminished value claim with the claims adjusters or service representatives you deal with over the phone. Each company is different in how much they can work with those claims over the phone; but one way or another you’ll end up on the phone with somebody so you might as well start there. Explain that you have a diminished value claim based on [repair, claim, inherent diminished value] and your appraisal(s) of the vehicle show it is $X less than what the car would have been worth without the accident and you want that claim paid. Do not let them scare you off of your claim or tell you they do not pay those claims. If the person you speak to cannot help then ask to speak with somebody who can.
Sending a diminished value claim demand letter
If you cannot make headway on the phones or they are dragging their feet then you need to send a demand letter. A demand letter explains the legal and factual basis for your claim and makes a demand for payment. The tone should be professional but firm. Your demand letter should include:
- A brief explanation of why you are writing the letter. This should be 2-3 sentences explaining that you have a diminished value claim under [your claim number] against [their insured driver] but you have been unsuccessful at resolving the claim over the phone. The diminished value claim arose from a collision on [the date] and repairs were completed on [the date] but there is still lost value.
- The legal basis for the claim. Explain that diminished value is a recognized claim in Texas for the lost market value of the vehicle caused by the acts of their insured.
- The factual basis for your claim. State the amount of your claim and show your work. If you have an appraisal from an appraiser you can attach the appraisal. If not, then explain the dates and where you received quotes on your car. Then show the range of prior and current sale prices on similar vehicles.
- Pay…or else. Explain that you believe the amount is a reasonable for your diminished value claim; and if the claim does not settle within a reasonable time period you will pursue other options.
Once you have the letter you need to mail it to the right group within the insurer and give them time to contact you. It is preferable to send correspondence by a trackable mail service. Lawyers generally send by certified mail with return receipt; but you can also send by any other USPS service with tracking or one of the for-profit carriers. You may need to give a couple weeks to get your letter to the right person and hear back.
In the last of this series on diminished value I will discuss moving forward once they receive your demand letter.