Early estimates project that over 1 million cars have been destroyed as a result of flooding from Hurricane Harvey. Harvey is expected to cost the insurance industry billions of dollars. With this many claims, insurance companies may try to under value your vehicle in order to reduce the money they have to pay out.
If you feel that your insurance company is not giving you a fair offer on your car or truck, contact us today to see if we can help. Generally, under Texas law, assuming you have comprehensive coverage, your insurance company must pay you the fair market value of your vehicle. There is no set formula and the process is different for each insurance company. As a result, there are a number of insurers that may try to under pay your claim.
At Sutliff & Stout, our attorneys are here to help. We can help you evaluate the value of your vehicle. We can help you deal with the insurance company. And we can help you understand your legal rights and options.
Or, simply click the button below to provide us with the basic information we need about you and your damaged vehicle.
Below we have tried to answer some common questions folks have about the process:
If I accepted payment for the total loss of my car or truck, is it too late to dispute the “fair market value”of my vehicle?
The short answer is: it depends. Did you sign a release? Was there a clear understanding and agreement as to the value? In many circumstances, you still have a right to pursue what you believe to be the fair market value of your car or truck.
The applicable legal doctrine is known as accord and satisfaction. The Texas Supreme Court has addressed this issue and held as follows:
- had [the insured] accepted the first [payment] instead of returning it, and had [the insurance company] then attempted to argue that the acceptance amounted to an accord and satisfaction, it would have confronted the following rule:
The evidence must establish an assent of the parties to an agreement that the amount paid by the debtor to the creditor was in full satisfaction of the entire claim. The minds must meet and where resting in implication the facts proved must irresistibly point to such conclusion. There must be an unmistakable communication to the creditor that tender of the lesser sum is upon the condition that acceptance will constitute satisfaction of the underlying obligation.
It has been said that the conditions must be made plain, definite and certain; that the statement accompanying the tender of a sum less than the contract price must be so clear, full and explicit that it is not susceptible of any other interpretation; that the offer must be accompanied with acts and declarations which the creditor is “bound to understand”.
The Court makes clear that the outcome in an individual situation will depend on the facts. Feel free to call us to discuss your situation free of charge.
What does a “total loss” mean under Texas law?
Texas courts have held:
“Property is a total loss if a reasonably prudent uninsured owner, desiring to restore the property to its pre-incident condition, would not utilize that property for such restoration. See State Farm Fire & Cas. Co. v. Mower, 917 S.W.2d 2, 4 (Tex. 1995); Glens Falls Ins. Co. v. Peters, 386 S.W.2d 529, 531 (Tex.1965); Royal Ins. Co. v. McIntyre, 90 Tex. 170, 182, 37 S.W. 1068, 1074 (1896). Logic dictates that, absent other factors, a reasonably prudent uninsured owner would not repair a vehicle where the repair costs exceeded the vehicle’s pre-incident fair market value.”
If I hire your Firm, what will it cost me?
Our lawyers work on a contingency fee basis so we don’t charge you anything unless we are able to recover you money. Also, to be fair to our clients, we only charge a fee on additional money we are able to obtain on your behalf. Meaning that if your insurance company is already offering you $7,500.00 for your car and we are able to get you $10,000.00, we only charge a fee on the additional $2,500.00.
Is my flooded car or truck a total loss?
The answer to this question is: it depends on the amount of flood damage and the value of your vehicle.
Consumer Reports recently published an article that explained the problem with fixing flooded cars and trucks. The article explained that flooded vehicles are very expensive to fix because “when water enters your engine’s air intake, it can lead to all sorts of problems,” says John Ibbotson, chief mechanic for Consumer Reports. On most cars, the intake is at the front of the car, and it brings in fresh air to the engine as you drive. “The water can enter this intake and fill your engine cylinders, which can stall the motor or leave the motor unable to turn over and start. In addition, there is the chance of computer modules failing from getting wet and long-term electrical problems down the road,” he says.
Generally speaking, if water got into the intake and electrical systems of your vehicle, the car or truck will most likely be a total loss.
What does “fair market value” or “actual cash value” mean under Texas law?
Under Texas law, “fair market value” is defined as “the price the property will bring when offered for sale by one who desires to sell, but is not obliged to sell, and is bought by one who desires to buy, but is under no necessity of buying.” Exxon Corp. v. Middleton, 613 S.W.2d 240, 246 (Tex. 1981); Taiwan Shrimp Farm Village Ass’n v. U.S.A. Shrimp Farm Dev., Inc., 915 S.W.2d 61, 71 (Tex. App.-Corpus Christi 1996, writ denied).
What does Texas law say about when the value of the property is determined?
The standard for measuring damages to personal property is the difference in its market value immediately before and immediately after the injury, at the place where the damage occurred. Thomas v. Oldham, 895 S.W.2d 352, 359 (Tex. 1995). When the property is totally destroyed, the measure of damages is the reasonable market value at the time of destruction. Hartford Ins. Co. v. Jiminez, 814 S.W.2d 551, 552 (Tex. App.-Houston [1st Dist.] 1991, no writ). This mean you must provide evidence of what the value of the vehicle was at the time of loss. Courts have held that evidence of what an insurance company paid or what you paid for the property is insufficient to establish the “fair market value.”
Can I get loss of use damages if my car or truck is a total loss?
Texas courts have held that if personal property such as a vehicle is damaged but is repairable, the owner may recover the cost of repairs and damages for loss of the use of the vehicle, but if the property is totally destroyed, the owner can recover only the market value of the property and not loss of use damages. However, this approach has been rejected by a number of other States and has been called into question by some Texas courts.
Texas law does allow you to recover loss of use damages when “the claimant under an insurance policy cannot replace destroyed property because of the insurer’s unreasonable delay in paying the claim.” The availably of these damages will depend on whether your insurance company drags its feet in paying your claim.
What evidence do I need to prove the value of my car or truck?
“A property owner is qualified to testify to the market value of his property.” Redman Homes, Inc. v. Ivy, 920 S.W.2d 664, 669 (Tex. 1996). Specifically, a car owner can testify as to the value of his own car. Foxx v. DeRobbio, 224 S.W.3d 263, 268 (Tex. App.-El Paso 2005, no pet.) (citing Calvert Fire Ins. Co. v. McClintic, 267 S.W.2d 568, 570 (Tex. Civ. App.-Waco 1954, writ ref’d n.r.e.)). So long as it is based on the owner’s estimate of market value and not some intrinsic or other value, this evidence is considered probative. Redman Homes, 920 S.W.2d at 669. In other words, a property owner’s testimony regarding the market value of his property is admissible evidence of damages “if his testimony shows he is familiar with the market value and his opinion is based on that market value.” Khorshid, 257 S.W.3d at 760.