Diminished Value Claims in Texas
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In Commissioners Bulletin B-0027-00, the Insurance Commissioner of Texas stated that in addition to recovery from the at fault driver's insurance company, the vehicle owner can also recover against the vehicle owner's uninsured motorist coverage if the at-fault driver lacks insurance. The bulletin reads in pertinent part:
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"The position of the Department is that an insurer is not obligated to pay a first party claimant for diminished value when an automobile is completely repaired to its pre-damage condition. The language of the insurance policy does not require payment for, or refer to, diminished value.
This bulletin is not intended to preclude the use of loss of market value as a measure that an insurer and first party claimant may use to settle other disputes. For example, if an automobile was repaired properly but the vehicle still does not function as it did before the accident, the insurer and policyholder may agree to use loss of the automobile's market value as a measure of damages to settle the dispute.
An insurer also 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, in a liability claim that the third party claimant may have against a policyholder. Further, an insurer may be obligated to pay a first party claimant under the uninsured/underinsured motorist coverage provisions of the policy, for any loss of market value of the first party claimant's automobile, regardless of the completeness of the repair."
| First Party Covered | NO | Third Party Covered | YES |
|---|---|
| Statute of Limitations | 2 YEARS |
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