A common statement I hear at my law firm about Texas diminished value claims is the insurance company insists they will not pay diminished value claims. In fact, this is probably the #1 statement I hear from people looking for help settling their diminished value claim. Insurance companies are experts in defending against car wreck claims. They will use every trick to deprive you of the value for the injury and your car.
Insurers in Texas know without an attorney you are less likely to take the right steps to defend your claim. After all, they are large businesses who have entire departments who do nothing but negotiate claims. They know you are inexperienced in dealing with insurance claims. They will waste your time and intentionally try to frustrate you to get you to give up.
Why insurance companies don’t pay diminished value claims in Texas
Diminished value claims–not all insurance companies buy into the validity of these claims. Diminished value claims began to appear with the easy access to instant car history reporting, like carfax.com. It allows car buyers to quickly and cheaply find information that harms the market value of cars.
Before instant car history reporting, it was time consuming to obtain that information, if available at all. Texas insurance companies have taken either an honest disbelief in diminished value or are intentionally dragging their feet to admit to them because it means more valid claims they have to pay. Regardless of why insurance companies are resistant, Texas law governs the validity of claims. Texas courts have recognized diminished value claims as legitimate property claims in car wrecks lawsuits. Disbelieving in their validity does not make them dishonest or invalid claims.
However, because some Texas insurance companies do not recognize diminished value claims, the insurers will refuse to settle the claims and will take their chances before Texas courts, as well as the courts of other states where these claims are recognized. This strategy relies on a hope that the insurance companies will take these diminished value claims in front of judges unsympathetic to plaintiffs and will rule against these claims. The insurance companies so far have not had great luck, at least in Texas, trying to defeat these claims. My expectation is that they will turn to the legislature to bar diminished value claims.
Why insurance companies tell you they don’t pay diminished value claims in Texas
The prime reason why insurance companies in Texas tell you they don’t pay diminished value claims in Texas is because they want you to believe if they don’t pay them then you have no hope to recover on them. That’s ridiculous. It’s like telling you they don’t pay to repair windshields or broken bones. The insurance companies do not get to pick and choose what they want to pay on valid claims.
Unless you let them.
Insurance companies know if you did not hire an attorney this argument may work. Refusing to pay the diminished value claim means the Texas insurer can continue to drain out the clock before the statute of limitations runs and you can no longer bring your claim. They also know a fair amount of people will just give up if they think the insurer won’t pay. Yet other people will immediately reduce their settlement demand to try to entice the insurance company to give them something. The problem is that negotiating against yourself is a poor tactic. The insurer can just keep saying no until you have whittled down your claim to nothing. If you do that and then hire an attorney, it can create problems getting the number back to fair value.
Why you need to hire a lawyer to represent your diminished value claim in Texas
Insurance companies know their tricks don’t work on a personal injury lawyer who understands diminished value claims. You need a lawyer who understands how insurance companies evaluate claims and work to negotiate from fair value rather than what the insurance company tells you is fair. You need a lawyer who knows when a reasonable settlement can be reached and when it is time to file suit to defend your rights. If you have been in a car accident with another vehicle and your car required cosmetic or mechanical repairs you may have a diminished value claim that deserves to be paid by the insurer.