Even after a quality repair, a car with an accident on its history is usually worth less than the same car without one. Buyers see the accident on a vehicle history report and offer less. That loss is called diminished value, and in Texas you may be able to recover it, depending on who caused the accident.
This guide is general information, not legal advice. For a large or disputed claim, talk to a Texas attorney.
Third-party claims: the main route in Texas
If another driver caused the accident, Texas law allows you to claim diminished value from that driver’s liability insurance, in addition to the cost of repairs. This is called a third-party claim, because you are claiming against someone else’s policy, not your own.
To make that claim you generally need to show:
- The other driver was at fault. Texas uses modified comparative fault, so if you were partly at fault your recovery is reduced, and if you were more than 50 percent at fault you cannot recover from the other driver.
- Your car lost value because of the accident.
- How much value it lost.
First-party claims: usually not covered
If you are claiming under your own collision coverage, diminished value is much harder. In American Manufacturers Mutual Insurance Co. v. Schaefer (2003), the Supreme Court of Texas held that the standard Texas personal auto policy does not require the insurer to pay diminished value on top of the cost of an adequate repair. Some policies may say otherwise, so read yours, but most people should not expect their own insurer to pay it.
The deadline
Texas generally allows two years from the date of the accident to bring a property damage claim, which includes diminished value (Texas Civil Practice and Remedies Code section 16.003). Insurers negotiate claims long before that, but do not let it slide.
What evidence helps
Insurance adjusters do not hand out diminished value just because you ask. The claims that succeed are the ones with documentation:
- The repair estimate and final invoice, showing what was damaged and what was replaced. Structural or frame work and airbag deployments usually mean a larger loss in value than a bumper cover.
- Photos of the damage before repair.
- Pre-accident value evidence, such as listings for comparable cars, service records, and the car’s mileage and condition.
- An independent diminished value appraisal. Many claimants hire an appraiser who compares the car’s value before the accident with its value after repair. Insurers take a written appraisal more seriously than an opinion.
- A dealer trade-in offer showing a lower number because of the accident history can also support the claim.
Which cars lose the most
Diminished value is usually larger when:
- the car is newer, low mileage, or high value,
- the damage was structural, such as frame or unibody repair,
- major parts were replaced, or airbags deployed.
An older, high-mileage car with a repaired bumper may have very little diminished value, and the appraisal fee may not be worth it.
A good repair is the foundation
A diminished value claim assumes the car was repaired properly. A poor repair is a separate problem, and it can hurt resale far more than the accident record. Keep every document from the repair: the estimate, the final invoice, and photos.
If your car was hit in Austin, start with a free estimate at 3801 Wadford St, Monday to Friday, 8 AM to 5 PM, or through our estimate page. The written estimate is also the first piece of evidence for a diminished value claim. See our insurance claims guide for how the repair side of a claim works.