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How Do Car Insurance Companies Calculate Diminished Value in Texas?
Ever wonder how insurance companies decide how much your car is worth after an accident? It’s a fair question.
When you get in a car wreck and your vehicle gets damaged, its value depletes. The worse the damage, the more it drops. Buyers won’t want to pay as much for a car that’s been damaged (even after repairs), and dealers won’t take the risk to trade-in.
How do the insurance companies calculate the value of your car after a crash? Here is what to be aware of and what you need to consider if you have been involved in a car crash.
Why Your Car Drops in Value
Even if your car is in better condition than before your wreck, it will unfortunately still lose value because it was damaged.
The belief here is that no matter how good the repairs may seem, they won’t be better than a car that’s never been in an accident before. Insurance companies refer to this as diminished value.
You Can Make a Claim for Your Car’s Diminished Value
Yes, it’s true: you can make an insurance claim for the diminished value of your car, but just know that insurance companies will try to either pay the lowest amount possible or avoid paying the claim altogether.
Insurance companies figure up how much your car was worth prior to your accident and then calculate what’s called a “base loss of value.” They get this number by taking 10% of your car’s original market value, and whatever it comes out to be, this will be the most a company will pay for the diminished value claim.
They will reduce the amount they will pay even more by assessing if the damage was not severe — if so, they further reduce what they will pay. The problem with this insurance company system is that you will not receive a payment from them that reflects your car’s value.
Insurance Companies in Texas
The tactics that many insurance companies use to get these numbers are a part of a system called the 17c Formula. Most companies use this system, but it is not required in the state of Texas. But the insurance companies do not want you to know this. That is why it is so important to be aware of this system and how insurance companies will try to get around paying for what they should.
One way to ensure that insurance companies don’t try to take you for a ride is by hiring a car wreck attorney in Houston Texas. Lawyers who are familiar with these tactics and shortcuts can help you dispute the misconstrued offers from insurance companies and get you the settlement you deserve.
Call One of the Best Car Accident Lawyers in Houston
If you’ve been involved in a car wreck and need an experienced Houston big rig collision lawyer that will stand with you and help you receive compensation, then trust the Stephens Law Firm to help get you through. Joe Stephens has more than 30 years of car accident legal experience as well as a personable team that will help bring your car crash case to justice. Call Joe Stephens for a free consultation today!
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