Diminished Value in Texas

Even after proper repairs, a vehicle that has been in an accident may be worth less than it was before the loss.

This reduction in market value is known as diminished value. In Texas, it can apply, but it is not automatic and is rarely explained during the claim process.

How Diminished Value Is Treated in Texas

Auto insurance claims in Texas are governed by the Texas Insurance Code, including provisions related to fair claim handling and the prohibition of misrepresentation.

Texas law does not require insurers to automatically include diminished value in every settlement. Instead, diminished value must be supported by evidence and evaluated based on the facts of the loss.

These standards are intended to ensure claims are evaluated fairly and communicated accurately, not to guarantee specific outcomes.

What Diminished Value Means

Diminished value is the difference between what a vehicle was worth immediately before an accident and what it is worth after repairs are completed.

Even when repairs restore function and appearance, accident history alone can reduce resale or trade-in value.

When Diminished Value Is Most Likely to Apply

Not every vehicle experiences measurable diminished value. Certain factors make value loss more likely.

• Newer vehicles with low mileage
• Vehicles with significant or structural damage
• Vehicles with a clean pre-loss history
• Models with strong resale demand

Why Diminished Value Is Often Denied or Overlooked

Diminished value is not included unless it is specifically raised and supported.

Without market-based documentation, insurers often take the position that proper repairs eliminate any loss in value.

Need Help Evaluating Diminished Value in Texas

EstiVerify helps determine whether diminished value may apply and whether pursuing it makes sense based on vehicle type, damage severity, and market conditions.

Related topics: Texas Repair Rights | Texas Total Loss