Arizona Vehicle Appraisal & Insurance Claim Resources

Arizona Administrative Code R20-6-801(H) establishes specific settlement standards for first-party automobile total losses. When a first-party automobile total loss is settled, the insurer may: (1) offer a specific comparable replacement automobile; or (2) make a cash settlement based on the actual cost to purchase a comparable automobile.

R20-6-801(H) addresses comparable vehicles in the local market area, applicable taxes, license fees, and ownership-transfer fees. The regulation requires documentation for deviations from the comparable-vehicle methodology, and addresses salvage deductions, betterment and depreciation, repair estimates, and repair-shop restrictions.

The Arizona DIFI provides consumer guidance on automobile insurance, including total-loss settlements. Policyholders who receive a total-loss settlement should review the insurer's valuation documentation and may contact DIFI if they believe a settlement is not consistent with applicable requirements.

Arizona automobile insurance policies commonly include an appraisal clause that provides a mechanism for resolving disputes over the amount of a loss. The availability of appraisal in a particular claim depends on the language of the applicable policy. No Arizona statute independently mandating an appraisal clause in automobile insurance policies has been independently verified.

Under a typical automobile insurance appraisal clause, when the insurer and the insured disagree on the amount of a loss, either party may demand appraisal. Each party selects a competent, independent appraiser. The two appraisers attempt to agree on the amount of the loss. If they cannot agree, they select an umpire. Any two of the three must agree for the appraisal award to be binding.

Questions about whether appraisal is available in a specific Arizona claim should be directed to a qualified attorney familiar with Arizona insurance law.

THIRD-PARTY DIMINISHED VALUE: In Oliver v. Henry, the Arizona Court of Appeals (2011) addressed third-party diminished value in a tort context. The court recognized that Arizona law does not require a damaged vehicle to actually be sold before diminished-value damages can be established in a tort claim. Competent evidence, including expert appraisal of pre-loss and post-repair values, may establish the loss. This is relevant to third-party diminished value appraisal in Arizona.

FIRST-PARTY DIMINISHED VALUE: Oliver v. Henry should not be used to conclude that every first-party insurance policy covers diminished value. Whether diminished value is recoverable under a first-party collision or comprehensive claim depends on the language of the insured's own policy and applicable authority. Many standard automobile insurance policies do not expressly provide for diminished value recovery under first-party coverages.

Questions about diminished value recovery in a specific Arizona claim should be directed to a qualified attorney familiar with Arizona insurance and tort law.