Hypothetical: Let's suppose that I am at fault in a collision that results in major damage to your new car. My insurance company pays $15,000 to the body shop that repairs your car and pays $1,500 to the car rental company that provided you a car while your car was being repaired. Suppose that you decide to trade the car and are then informed by the dealer that your car lost $5,000 in trade-in allowance because it was in a wreck. What might you do if you trade or if you don't?

A) In a scenario where I am upside down, hope I had gap insurance or stated value coverage.

B) if no gap insurance, you can sometimes roll that excess loan into the new car purchase. This is usually an awful idea and exacerbates the issue.

C) prudent thing is to go with an affordable car at this point., or come up with the cash to cover the lost value.

Side note: The rental coverage is not impacting the main claim, it is separate coverage within same policy. Deductible will also be a hole, of course. Un/under insured motorist coverage could also come into play.

I went through this filing against my own insurance company after the fact for a diminished value claim. Wreck was not my fault and the driver was uninsured. It was not fun and it took time but finally got $3,000. I believe there is a 12-24 month window on it.

A friend was rear ended on Texas Ave. After repairs costing around $13,000 were made, he called the at-fault party's insco to inquire about loss of value-a real loss. He did not prepare a formal claim. The insco determined that the loss of value was $4,108 and sent my friend a check in that amount...as simple as that.

Why is it that so few know of this? I learned of it when I traded a car that had been rear-ended.

The loss of value amount goes down pretty quickly as the car ages. It is most applicable to newer cars.

But you should absolutely try for this is you are hit and not at fault.

I Googled Diminished value in Texas . Insurance Commissioner's Bulletin B #002700 written over 20 years ago popped up. Two years to claim.

I bought an $80K truck about a year ago and the next day when I got to my office and was parking in the parking garage the sign saying 7'0" was wrong and there was a fire extinguisher that was 6'7" that caused $15K in damage. The building owners insurance wasn't going to give me diminished value so I hired a diminished value expert for $200 to do a report and then said "lawyer" when giving it to them and they gave me several thousand dollars. My understanding is that diminished value payoffs are pretty rare though.

Thanks to the contributors on this thread!

I had someone pull in front of me causing damage in Oct 19. Luckily, it was under the 2 yr timeframe. Placed a call around 9am and got a callback at noon from the at fault insurance company saying they were sending a check for $1500.

I will use this money to have a football watching party vs Colorado. Whoop!

agcrock2005 said:

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I bought an $80K truck about a year ago and the next day when I got to my office and was parking in the parking garage the sign saying 7'0" was wrong and there was a fire extinguisher that was 6'7" that caused $15K in damage. The building owners insurance wasn't going to give me diminished value so I hired a diminished value expert for $200 to do a report and then said "lawyer" when giving it to them and they gave me several thousand dollars. My understanding is that diminished value payoffs are pretty rare though.

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I did something similar with my M5 that was T-boned. Appraisal cost $300 but was well worth it, net me another $3500 or so.

I want a disclosure law. Rep Ed Thompson filed HB552...last time I checked it was not out of the House Insurance Committee. I do not think it is adequate. Media should jump all over this. I went to The Eagle last June and asked that a reporter do a story. Was told that The Eagle is a local newspaper and that this does not appear to be a local issue. Not a local issue? It is more than a local issue but it is a local issue. Thousands of auto accidents occur annually in Brazos County alone. I have stats from CSPD and BPD. DPS investigates accidents that occur out in the county. Many accidents are not investigated...the parties simply exchange insurance info. I for three years have studied the matter. Fascinating!

HB552 did not make it out of insurance committee. It IMO was not a good bill. If you were not at fault in a collision, did body shop employee or manager tell you of diminished value claims...even mention it? Did insco claim rep? Did agent? My guess is no, no and no! I was surprised when my dealer mentioned it when I traded. I made a claim and collected $'s based on "factors" used by the insco.

Sandman98 said:

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Not sure if this answers your question. My wife was hit by someone and we had to ask for a diminished value benefit. We got $2000 but they weren't going to offer.

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Did this years ago (like 16yrs ago). Adjuster came out and said he would provide 10% or repairs or $800. I asked for $1.5k Settled at $1.2k. Know the trade in value. Get at least 10% of that. There probably is some guide. I kept the SUV for another 7 years and then sold for cash for almost double what lot offered.

What about a leased car?

My wives car is two years old with another year on the lease. It was hit by a box truck on the freeway that took off which resulted in another car hitting her in the rear. Total cost was 14k to fix.

We were probably going to purchase the car at the end of the lease but now I feel like its not worth what the payoff was. I called Farmers about it and they said I am not technically the owner so there was nothing they could do about diminished value. I called Lexus and they said if I wanted to fight it they would send a letter giving me authority so I did.

I sent that to Farmers and they came back with a offer of $2700 which I i have no idea if that is fair or not.

So I guess my question is, how do you know what is fair on a offer from the insurance co? I feel like they probably low ball you at first.....and how do you fight it?

I am OP. Congrats on making claim and at least getting an offer. When I made my claim of $5000 based on the hit that I took on trade and what another dealer told me, USAA sent a check for $1166.43 based on USAA "factors." I sent the check back but finally accepted rather than get a lawyer. That so few people even know that they can make legitimate claim is shameful!