Along with injuries, I also handle claims for motor vehicles that are involved in accidents. These claims are generally the following:

1. DIMINISHED VALUE A vehicle that has been damaged and repaired normally diminishes in value.  Under Texas law diminished value is defined as the difference between the market value of a vehicle immediately before an accident (for example a $250,000.00 Ferrari) and the market value of the vehicle immediately following its repair (perhaps $200,000.00; $250,000.00 – $200,000.00 = $50,000.00 diminished value).

Market value is defined as the amount that would be paid by a willing buyer to a willing seller when neither, respectively, must buy or sell.  A vehicle’s market value may be established before the accident and after its repair with evidence of auction and retail purchases of that vehicle type from sources such as Kelley Blue Book, NADA, auctions, appropriate dealerships, and private sales.

2. LOSS OF USE In addition to diminished value, the owner of a vehicle may be compensated for the loss of its use.  The predominant view is that an owner must elect one of two remedies for loss of use:  rental value or lost net profit.

RENTAL VALUE: An owner may obtain the rental value (for example, $1,000.00/day for a Ferrari) for the identical vehicle or a vehicle in the same class as the damaged vehicle, times the number of days (for example, 180 days) required to repair it ($1,000.00/day x 180 days = $180,000.00). A vehicle’s rental value is obtained from agencies that rent the identical or same class of vehicle as the owner’s damaged vehicle.

NET PROFIT: During the period that an owner has lost use of a vehicle, the owner may obtain lost net profit that the vehicle would have generated had it not been damaged. Normally, a vehicle’s lost net profit is determined by the owner, accountant, or economic expert.

3. TOTALLY DESTROYED VEHICLES

MARKET VALUE: When a vehicle has been totally destroyed, an owner may recover the difference of the vehicle’s market value immediately before the vehicle was destroyed (for example $250,000.00 for a Ferrari) and immediately following its destruction (for example a $25,000.00 salvage value; $250,000.00 – $25,000.00 = $225,000.00).

LOSS OF USE: In addition to its market value at the time of the accident, an owner may obtain the vehicle’s rental value (for example $1,000.00/day) of the destroyed vehicle or a vehicle in its class, times the reasonable period of time (for example, 100 days) required to replace the vehicle ($1,000.00/day x 100 days = $100,000.00), or lost net profit for the reasonable period of time required to replace the vehicle. In Texas a vehicle is totally destroyed when its repair cost exceeds the vehicle’s market value immediately before the damage occurred.

CRITICAL TIME PERIODS There are two critical time periods that a vehicle owner should comply with. Failure to obtain evidence within these periods can harm the owner’s claims:

DIMINISHED VALUE: Evidence of the value of the vehicle after it has been repaired should be obtained immediately after its repair.

LOSS OF USE: Evidence of the rental value of the vehicle or a vehicle in its class should be obtained during the period that the owner loses use of the vehicle.

WANT TO KNOW MORE? For a more thorough explanation of diminished value, loss of use and totally destroyed vehicle claims, you are invited to read my internationally-published articles.