American Manufacturers Mutual Insurance Co. v. Schaefer

In this case, we must decide whether the Texas Standard Personal Auto Policy obligates an insurer to compensate a policyholder for a vehicle’s diminished market value when the car has been damaged but adequately repaired. We hold that it does not, and accordingly reverse the court of appeals’ judgment.

I

Gary Schaefer purchased a standard automobile insurance policy 1 from American Manufacturers Mutual Insurance Company (AMM). Part D of the policy, entitled “Coverage for Damage to Your Auto,” provides that AMM will pay for “direct and accidental loss to your covered auto ....” The payment…