Diminished value claim in Texas

In Texas the answer depends on whose insurer you are claiming against. Here is what the Supreme Court of Texas has said about each route.

Last reviewed: October 23, 2026 · For readers in the United States

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"Third party" here means a claim against the at-fault driver's liability insurer. "First party" means a claim under your own collision cover.

Claim against the at-fault driver's insurer

Texas law measures your loss as the drop in market value, or the repair cost plus any value still lost after repair, plus loss of use. In J&D Towing, LLC v. American Alternative Insurance Corp., 478 S.W.3d 649 (Tex. 2016), the Supreme Court of Texas quoted Pasadena State Bank v. Isaac (Tex. 1950): damages include "the difference between the value of the chattel before the harm and the value after the harm or, at the plaintiff's election, the reasonable cost of repair or restoration where feasible, with due allowance for any difference between the original value and the value after repairs, and (b) the loss of use."

Claim under your own policy

Not under the standard Texas policy after an adequate repair. In American Manufacturers Mutual Insurance Co. v. Schaefer, 124 S.W.3d 154 (Tex. 2003), the court asked "whether the Texas Standard Personal Auto Policy obligates an insurer to compensate a policyholder for a vehicle's diminished market value when the car has been damaged but adequately repaired" and held "that it does not".

Is there a set formula in Texas?

No clear rule. No Texas statute sets a diminished value formula.

Evidence to gather

The evidence an insurer will expect is the same in every state: see the evidence checklist in the main guide, and use the free worksheet to record comparable listings and offers.

Related guides

• Diminished value claim after repair (main guide, with the evidence checklist)
• Diminished value claim in Georgia
• Diminished value claim in Florida
• Diminished value claim in California
• Free diminished value worksheet

Sources

• J&D Towing, LLC v. American Alternative Ins. Corp., 478 S.W.3d 649 (Tex. 2016), Justia
• American Manufacturers Mutual Ins. Co. v. Schaefer, 124 S.W.3d 154 (Tex. 2003), court PDF