Dallas Fort Worth Insurance Lawyer Blog

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.

Here is some basic information about automobile policy coverage for damage to your insured vehicle.

Under this portion of an auto policy the limit of liability to the insurer is the lesser of:  1)  the actual case value of the stolen or damaged property, 2)  the amount necessary to repair or replace the property with like, kind, and quality, 3)  the amount stated in the declarations of the policy.

The terms “repair” and “replace” mean restoring the auto to essentially the same condition as it was in immediately before the damage.  This is discussed in the 1969, Corpus Christi Court of Appeals opinion, Northwestern National Insurance Co. v. Cope and the 1998, Austin Court of Appeals opinion, Great Texas County Mutual Insurance Co. v. Lewis.

Here’s some basic information for insurance lawyers.

“Collision” is defined in the standard policy as “the upset, or collision with another object, of your covered auto.”

As an example, in the 1984, Amarillo Court of Appeals opinion, Nutchey v. Three R’s Trucking Company, Inc., a three-inch depression in a road, which caused damage to a trailer fell under this definition of “collision.”

The terms of coverage for damage to the auto are fairly straightforward: “named-peril” coverage is provided on “covered autos.”  Specifically, the Texas Personal Auto Policy provides that the carrier will pay for “direct and accidental loss to your covered auto.”  The coverage is divided into “collision” coverage and “coverage other than collision.”  The “other than collision” coverage insures against more causes of loss than collision coverage.  If both collision coverage and the “other” peril coverage are purchased then the insured is said to have “comprehensive” coverage.   Different deductibles are charged for each coverage because insureds elect not to carry one of the two available coverages.

The most common type of loss is “accidental loss,” however the definition of “accidental loss” loss is not in most policies.  In 1997, the Austin Court of Appeals issued an opinion in State Farm Mutual Automobile Insurance Co. v. Kelly, which held that an “accidental loss” is a loss that does not ordinarily follow and cannot reasonably be anticipated from the producing act, that is, one that the actor did not intend to produce.  In Kelly when an insured made a good faith purchase of a stolen vehicle and insured it, only to have the police confiscate it and return it to its true owner, such an act is not the natural and probable result of the insured’s good faith purchase.  Accordingly, the loss of the vehicle was “accidental.”  Even though the insured intentionally purchased the vehicle, the ensuing confiscation by the police was unexpected, unanticipated, and unintentional on the insured’s part.  The court went on to say that a stolen vehicle, newly acquired by an insured was a “covered auto” even if the insured did not have good title.  The insured had an insurable interest that was enough to make it a covered auto.

In the 1955, Fort Worth Court of Appeals opinion, Farmers Insurance Exchange v. Wallace, an auto upset by a strong gust of wind while being driven on a public road was an accidental loss.