Arkansas Vehicle Appraisal & Insurance Claim Resources

Arkansas Insurance Department Rule 43 — Unfair Claims Settlement Practices, now identified by Arkansas as 23 CAR pt. 15 — establishes specific standards for first-party automobile total-loss settlements. The Rule has been verified against the current official Arkansas Insurance Department source.

Under Rule 43, a cash settlement for a first-party automobile total loss may be based on the actual cost to purchase a comparable automobile, including applicable taxes, license fees, and other ownership-transfer fees actually incurred. The Rule addresses comparable automobiles in the local market area, dealer and appraisal-service quotations where appropriate, and documentation of deviations from the comparable-vehicle methodology.

Rule 43 also addresses measurable and itemized salvage deductions, repair-shop choice, and repair estimates. Policyholders who receive a total-loss settlement should review the insurer's valuation documentation and may contact the Arkansas Insurance Department if they believe a settlement is not consistent with applicable requirements.

Ark. Code Ann. §23-66-206(13)(O), as supported by Arkansas Insurance Department guidance, addresses repair-shop choice in the context of automobile insurance claims. Policyholders should review the applicable policy and consult the Arkansas Insurance Department or a qualified attorney for guidance on their rights regarding repair-shop selection.

Arkansas 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 Arkansas 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 Arkansas claim should be directed to a qualified attorney familiar with Arkansas insurance law.

FIRST-PARTY DIMINISHED VALUE: In Farmers Insurance Co. v. Snowden (Arkansas Supreme Court, 2006), the court addressed litigation concerning whether particular personal-auto policy language obligated payment of first-party diminished value. The case involved class-certification issues and the specific policy language before the court. It should not be read as a universal coverage holding establishing that all Arkansas policies do or do not cover first-party diminished value. Whether a particular Arkansas policy requires payment of first-party diminished value depends on the specific policy language and applicable authority.

THIRD-PARTY DIMINISHED VALUE: Whether diminished value is recoverable from an at-fault third party in Arkansas depends on applicable tort law principles and the specific facts of the claim. Questions about third-party diminished value recovery in Arkansas should be directed to a qualified attorney.