How to File a Diminished Value Claim in Texas (With a Free Template)
If you’ve been in a car accident in Texas and the other driver was at fault, you may be entitled to diminished value compensation. Even after your vehicle has been repaired, it is no longer worth as much as it was before the accident. This is where a diminished value claim comes into play.
In this post, we’ll explain what diminished value is, how to calculate it, and provide you with a free diminished value claim letter template you can use to submit your claim to the at-fault party’s insurance company.
What Is a Diminished Value Claim?
Diminished value refers to the loss in resale value of a vehicle after it has been involved in an accident, even if it has been fully repaired. Potential buyers or dealerships typically pay less for a car that has a history of damage, as they perceive it as being less reliable or structurally sound.
There are three types of diminished value:
- Inherent Diminished Value – The most common type, referring to the automatic loss in value due to an accident history.
- Repair-Related Diminished Value – When improper or incomplete repairs further reduce the vehicle’s value.
- Immediate Diminished Value – The loss in value that occurs immediately after an accident but before repairs are made.
How to Calculate Diminished Value in Texas
Insurance companies often use a formula called the 17c Diminished Value Formula, which estimates the loss in value based on:
- Your car’s pre-accident market value
- A base loss percentage (typically 10%)
- A damage severity multiplier
- A mileage depreciation factor
To get the most accurate number, we recommend obtaining a third-party appraisal from an independent auto appraiser.
How to File a Diminished Value Claim in Texas
To file a diminished value claim, follow these steps:
- Obtain a Repair Estimate & Accident Report – You’ll need proof that your vehicle was in an accident and has been repaired.
- Get a Diminished Value Appraisal – Hire an independent appraiser or use an online valuation tool.
- Submit a Demand Letter – Send a formal request to the at-fault driver’s insurance company.
- Negotiate Your Claim – The insurer may push back, so be prepared to negotiate.
- Seek Legal Help if Denied – If the insurer refuses to pay, an attorney can help you escalate your claim.
Below, we’ve provided a diminished value claim letter template you can use to submit your request to the insurance company.
Diminished Value Claim Letter Template
📌 Copy and customize this template before submitting it to the at-fault party’s insurer.
[Your Name]
[Your Address]
[City, State, ZIP Code]
[Your Phone Number]
[Your Email]
[Date]
Claims Department
[Insurance Company Name]
[Insurance Company Address]
[City, State, ZIP Code]
Subject: Diminished Value Claim for [Your Vehicle Year, Make, Model] – Claim #[Claim Number]
Dear [Insurance Adjuster’s Name],
I am submitting this diminished value claim for my vehicle, which was involved in an accident caused by your insured, [At-Fault Driver’s Name], on [Date of Accident].
Vehicle & Accident Details:
- Vehicle: [Year, Make, Model, VIN]
- Mileage at Time of Accident: [Mileage]
- Accident Date: [Date]
- Claim Number: [Claim Number]
- Repair Costs: [Total Repair Cost]
Even after professional repairs, my vehicle has suffered a significant diminished market value due to its accident history. I have obtained an independent diminished value appraisal, which estimates my loss at $[Amount].
Supporting Documents:
✔ Accident report
✔ Photos of vehicle damage (before and after repairs)
✔ Repair invoices
✔ Third-party diminished value appraisal
I request compensation in the amount of $[Amount] for this loss. Please respond within 15 business days from the date of this letter. If I do not receive a satisfactory response, I am prepared to escalate this matter, including filing a complaint with the Texas Department of Insurance or pursuing legal action.
Please contact me at [Your Phone Number] or [Your Email] to discuss the next steps.
Sincerely,
[Your Name]
What to Do if the Insurance Company Denies Your Claim
If the insurance company denies your claim or offers a lower settlement, don’t give up. Many insurers try to lowball or reject diminished value claims, hoping claimants won’t fight back.
Here are your options:
✅ Negotiate Further – Provide additional evidence, such as multiple appraisals.
✅ File a Complaint – Report the insurer to the Texas Department of Insurance.
✅ Consider Small Claims Court – If your claim is under $20,000, you can sue in Texas small claims court.
✅ Hire an Attorney – An experienced Texas car accident lawyer can handle your claim and negotiate on your behalf.
