Why insurance companies don’t care about your diminished value claim: Texas lawyer explains

I receive many calls and emails each week regarding diminished value claims. Almost every time, the story is the same. Although the other driver caused the wreck, the insurance company refuses any discussion of a diminished value claim. The person might pursue a few hundred dollars all the way up to tens of thousands of dollars.

Regardless of the amount, the insurance companies usually pitch the same handful of responses like, “we don’t pay on diminished value” or “Texas law doesn’t entitle you to diminished value.”

Insurance companies and diminished value claims in Texas

Insurance companies hate diminished value claims. They consider these claims dubious but let’s be honest: it’s really all just about the money. They know most consumers do not understand the claims process and they can often shut down a diminished value claim by dragging their feet. Just because they do not want to pay on the claim doesn’t mean the claim isn’t valid. Texas courts have upheld diminished value as a recoverable harm for almost as long as cars have been driven.

The reason why the insurance company feels it can get away with stalling you out and/or lowballing you is again, about the money. The insurance company is not only assessing the value of your claim based upon the lost value to your vehicle but also the potential costs to litigate the claim.  Most diminished value claims are less than $10,000. A lawyer taking that claim on contingency might charge anywhere from 20-40%. Even taking $4,000 on a litigated claim is often a loss for the attorney.

Trial work involves a lot of time. It’s extremely difficult for most attorneys to earn a living, after paying business expenses, making so little money. And even if possible the attorney can probably find better paying work. The insurance companies understand this. They know if the dollar value is too low then you won’t find an attorney and they can take advantage of your lack of experience in claims adjusting. On the other hand, if the diminished value claim is much higher then the insurance company is more likely to want to fight out the claim through litigation. So they know you will either give in to their lowball offer or you’ll hire an attorney.

The insurance company’s financial analysis isn’t always correct. Some attorneys who handle diminished value claims will accept smaller claims because they can use efficient case management. Contact my Bedford law office today to discuss your diminished value claim.

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