Short answer
In Texas you can ask the at-fault driver’s insurer for diminished value: the Texas Department of Insurance says a liability insurer may owe a third-party claimant for lost market value regardless of how complete the repairs are (Bulletin B-0027-00). Your own collision coverage generally doesn’t pay it once the car is fully repaired — the Texas Supreme Court held the standard policy doesn’t cover it (Schaefer, 2003). Your uninsured motorist coverage may.
What diminished value is
Diminished value is the drop in what your car is worth because it was in a crash — the difference between its value right before the crash and its value after repairs. Buyers and dealers often pay less for a vehicle with an accident on its history report, even when the work was done well.
Claiming it from the at-fault driver’s insurance
When another driver caused the crash, your vehicle-damage claim is against their liability insurance. The Texas Department of Insurance’s Commissioner’s Bulletin B-0027-00 says a liability insurer may be obligated to pay a third-party claimant “for any loss of market value of the claimant’s automobile, regardless of the completeness of the repair.”
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Claiming it from your own insurance
- Collision coverage: the Texas Supreme Court held that the standard Texas personal auto policy doesn’t require the insurer to pay diminished value on top of adequate repairs (American Manufacturers Mutual Insurance Co. v. Schaefer, 2003). The Department of Insurance takes the same position for a car that is completely repaired.
- Uninsured/underinsured motorist coverage: the Department says an insurer may owe you lost market value under UM/UIM, regardless of how complete the repair is (Bulletin B-0027-00). That matters when the at-fault driver had no insurance or too little — see uninsured driver claims.
How to support a diminished value claim
- Keep the repair estimate and the final repair invoice — they show how serious the damage was.
- Get a written appraisal of the car’s value before the crash and after repairs, from an independent appraiser or a dealer.
- Collect listings of comparable vehicles with and without accident history.
- Send the claim in writing to the at-fault driver’s insurer with your documents, and keep copies.
Texas law doesn’t set a formula for the amount. The claim is about the drop in market value, and the better your evidence, the stronger it is.
The deadline
A lawsuit for property damage — including diminished value — generally must be filed within two years of the crash (Civil Practice and Remedies Code §16.003). See the Texas statute of limitations.
Frequently asked questions
Can you claim diminished value in Texas?
Yes, against the at-fault driver’s liability insurer. The Texas Department of Insurance says a liability insurer may owe a third-party claimant for lost market value regardless of how complete the repair is (Bulletin B-0027-00).
Does my own insurance pay diminished value in Texas?
Generally not under collision coverage once the car is fully repaired (Schaefer, Tex. 2003). Your uninsured/underinsured motorist coverage may pay it.
How is diminished value calculated in Texas?
Texas law doesn’t set a formula. The claim is the drop in market value caused by the crash, usually supported by an independent appraisal and comparable vehicle listings.
How long do I have to file a diminished value claim in Texas?
A property-damage lawsuit generally must be filed within two years of the crash (Civil Practice and Remedies Code §16.003). Make the claim to the insurer well before then.
Texas law and sources cited
- Texas Department of Insurance Commissioner’s Bulletin B-0027-00 — diminished value
- American Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154 (Tex. 2003)
- Tex. Ins. Code §1952.101 — uninsured/underinsured motorist coverage
- Tex. Civ. Prac. & Rem. Code §16.003 — two-year limitations period
General information, not legal advice. DFW Crash Data is not a law firm, and every situation is different — for advice about your own claim, talk to a licensed Texas attorney. Laws change; the sources above were checked on the date shown at the top of this page.