The terms “repair” and “replace” mean restoring the automobile to essentially the same condition as it was in immediately before the collision. It would not be restored to the same condition if the repairs left the market value of the auto substantially less than the value before the collision. This was the decision in the 1969, Corpus Christi Court of Appeals opinion, Northwestern National Insurance Company v. Cope.
As stated in the 1968, Tyler Court of Appeals opinion, Agricultural Workers Mutual Automobile Insurance Company v. Dawson, if a vehicle is repairable, the insured is entitled to no more than what it would cost to repair the property. This presumes the vehicle has been repaired to essentially the same condition that it was in before the loss. But if, after repair, the vehicle has not been restored to the same condition as it was in immediately before the loss, the owner may be entitled to recover for diminution in value without necessarily showing the repairs were inadequate. This was discussed in the 1968, Texas Supreme Court opinion styled, Superior Pontiace Co. v. Queen Insurance Co.
If an insurer repairs a vehicle, it must use parts of “like kind and quality” according to the 2003, Texas Supreme Court opinion styled, American Manufacturers Mutual Insurance Co. v. Schaefer.
“Like kid and quality” permits the insurer to deduct for betterment or depreciation. One court explained: “Like kind and quality refers to parts fit for their intended purpose rather than parts similar in age, condition or value to the parts damaged.”