Diminished Value of a Vehicle After an Accident

Attorney Doug Goyen When a car is involved in a collision, its value is often permanently reduced. The diminished value of a vehicle occurs when a vehicle involved in an auto accident sustains structural, cosmetic, or both. The diminished value of a vehicle is a type of property damage claim. Even if the car is repaired to like-new condition, it is still worth a lower amount of money than it was prior to the car accident.

When a person attempts to sell a vehicle, the diminished value of a vehicle results in a loss to the person due to a reduction in the value of the vehicle. Many states require complete disclosure of any accidents in which a vehicle was involved. Because most buyers prefer cars that have not been in an accident, the owner of a vehicle that has been in an accident will receive less money for his or her vehicle than if the vehicle had never been in any accidents at all.

If you have been injured in an accident and think you may have a diminished value claim for your vehicle, call our car accident lawyers in Dallas, Texas at (972) 599 4100.

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Vehicle accident with motorcycle police In Texas, you can make a diminished value of a vehicle claim when making your claim against another due to their negligence. If you are filing a claim against another person or company for their negligence that caused the damage to your vehicle, you can make a claim for the diminished value of your vehicle. So if you are making a liability claim for the damage to your vehicle, you can make a claim for your diminished value.

The two types of auto insurance in Texas that cover “liability” claims in auto accidents are 1) Liability Insurance (the auto insurance of the other driver who was at fault), or 2) Uninsured Motorist Property Damage (your own auto insurance that covers you when the driver who caused the accident is uninsured). This is a first-party coverage – meaning that you purchased it, but it takes the place of the other driver’s liability insurance in the case of an uninsured driver.

However, you will likely not be able to file a diminished value claim against your own automobile insurance under collision or comprehensive coverage. Auto insurers exclude claims for “diminished value” under collision and comprehensive coverage. Therefore, contractually it is an excluded claim against your own insurance under collision coverage and comprehensive coverage.

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In a suit for personal property damage, the plaintiff can recover damages for the loss or reduction in the value of the property. City of Tyler v. Likes, 962 S.W.2d 489, 496-97 (Tex.1997).

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Market value is the most common method of valuation. If the market value cannot be determined, other valuation methods, such as replacement value, actual value, and sentimental value, can be used. International-Great N.R.R. V. Casey, 46 S.W.2d 669, 670 (Tex. Comm’n App.1932, holding approved); see Bueckner v. Hamel, 886 S.W.2d 368, 374 (Tex.App.-Houston [1st Dist.] 1994, writ denied)(actual or intrinsic value may be used only when the market value or replacement value cannot be determined).

Market Value: The price that the property would fetch if it were offered for sale by a willing but unobligated seller and purchased by a willing but unobligated buyer. Exxon Corp. v. Middleton, 613 S.W.2d 240, 246 (Tex.1981); Polk Cty v. Tenneco, Inc., 554 S.W.2d 918, 921 (Tex.1977); Lee v. Dikes, 312 S.W.3d 191, 194 (Tex.App.-Houston [14th Dist.] 2010, no pet); Waste Disposal Ctr., Inc. v. Larson, 74 S.W.3d 578, 583 (Tex.App.-Corpus Christi 2002, pet denied).

Measuring Market Value: When personal property is damaged or destroyed, the market value is the difference between the item’s value before and after the damage. Thomas v. Oldham, 895 S.W.2d 352, 359 (Tex.1995)(property damaged).

Place of Damage: The market value must be determined in the county where the damage occurred. Thomas, 895 S.W.2d at 359.

Diminished Value of a Vehicle must be after repairs made: A plaintiff can recover both repair costs and diminution of value, but they must be very clear in the jury charge that the jury’s diminution of value award is to be for the value after repairs are completed in order to prevent any double recovery. Houston Unlimited, Inc. v. Mel Acres Ranch, 443 S.W.3d 820 (Tex. 2014).

Proving Market Value: 

1. Opinion Testimony: In order to prove market value, the plaintiff can offer her own or an expert’s testimony about the property’s value, as long as the testimony relates to market value rather than intrinsic or other types of value. Thomas, 895 S.W.2d at 359.

Must Testify Familiar With Market Value: The witness must state that she is familiar with the property’s market value and that her opinion is based on that value. Redman Homes, Inc v. Ivy, 920 S.W.2d 664, 669 (Tex. 1996).

Must Testify of Before and After Values near Time of Accident – not at the time of trial: The market value testimony must center on the value of the property at the time it was damaged, not the value at the time of trial. Town East Ford Sales, Inc. v. Gray, 730 S.W.2d 796, 802 (Tex.App.- Dallas 1987, no writ).

2. Appraisal Guides and Photographs: The plaintiff can use published appraisal guides and before-and-after photographs of the damaged property to prove market value. Jones v. Wallingsford, 921 S.W.2d 463, 464-65 (Tex.App.-Eastland 1996, no writ).

3. Repair costs. The plaintiff can introduce evidence of the cost of repair to prove market value, not as an alternative measure of damages, but as proof of the difference in fair market value. Celanese Ltd. v. Chemical Waste Mgmt., 75 S.W.3d 593, 598-99 & n.1 (Tex.App.-Texarkana 2002, pet. denied).

If repairing the property would effectively restore it to new condition or full functionality, the cost of repair may be the only evidence to support a claim for lost market value. In such a case, the difference in value between before and after the property damage can be defined as the cost of the repairs.

Improper Methods of Trying to Prove Market Value: 

1. Purchase Price. The plaintiff cannot rely on the property’s purchase price to determine market value. Alan Reuber Chevrolet, Inc v. Grady Chevrolet, Ltd, 287 S.W.3d 877, 889 (Tex. App-Dallas 2009, no pet); Taiwan Shrimp Farm Vill. Ass’n v. USA Shrimp Farm Dev, Inc, 915 S.W.2d 61, 71 (Tex.App.-Corpus Christi 1996, writ denied).

2. Insurance Payment. The plaintiff cannot rely on the amount paid for the loss by the plaintiff’s insurance company to determine market value. Hartford Ins v. Jiminez, 814 S.W.2d 551, 552 (Tex. App- Houston [1st Dist] 1991, no writ).

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If you are looking for a Dallas, Texas car accident lawyer, call (972) 599 4100. We offer free phone consultations with a Dallas personal injury attorney. We also provide a free strategy session. The strategy session includes a summary of your case, legal issues involved, and legal issues we identify as being critical to maximizing the compensation owed.


You owe us nothing if we are unable to recover. We charge a contingency fee structured to take a percentage of what we recover. As a performance-based contract, the better we do for you, the better we do for ourselves. This aligns our interests in the case with our client’s interests.


15851 Dallas Pkwy #605
Addison, Texas 75001
(972) 599 4100 phone
(972) 398 2629 fax

Directions to our office: We are on the southbound side of the service road to the Tollway. Stay on the Dallas North Tollway until you come to the Keller Springs exit. Take the Keller Spring exit. Stay on the service road on the southbound side and go just past Keller Springs. Our office is the 2nd building south of Keller Springs, located on the service road to the North Dallas Tollway in the Madison Business Center on the 6th floor.

By Doug Goyen, douggoyen@goyenlaw.com

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