Diminished Value Appraisal in
Arizona

Last updated: August 18, 2025

Arizona law recognizes recovery of diminished value (DV) in the right circumstances—most commonly in third-party liability claims when another driver damages your vehicle. This guide explains when DV is recoverable in Arizona, the controlling case law and statutes, what to document, step-by-step filing instructions, key deadlines, and why a professional SnapClaim appraisal can materially strengthen your result.

Does Arizona Allow Diminished Value — and When?

• Third-party (against the at-fault driver’s insurer) — Yes. Arizona courts allow recovery for the difference in fair market value that remains after proper repairs. In Farmers Ins. Co. of Ariz. v. R.B.L. Investment Co., the court recognized compensation for loss in value beyond the cost of repair; later, Oliver v. Henry confirmed a DV claim is compensable even if the owner hasn’t sold the vehicle. See R.B.L. and Oliver v. Henry.
• First-party (your own collision/comprehensive) — Usually no DV. Standard Arizona policies often limit first-party payment to repair or replacement and exclude inherent DV unless you have a specific endorsement. See industry summaries (e.g., MWL overview).

Arizona Legal Framework

• Measure of damages: In tort, an owner may recover reasonable repair cost plus any proven post-repair diminution in value (not to exceed pre-loss value). See R.B.L. and Oliver.
• Comparative negligence: Arizona follows pure comparative negligence, reducing damages by the claimant’s fault share (with an exception for willful/wanton conduct). See A.R.S. § 12-2505.
• Claims-handling standards: Insurers must handle claims fairly under Arizona’s Unfair Claims Settlement Practices Act and related regulations. See A.R.S. § 20-461 and A.A.C. R20-6-801.

Types of Diminished Value Recognized in Practice

• Immediate DV — the drop in value right after the crash, before repairs.
• Inherent (stigma) DV — market discount that remains after proper repairs because of the accident history.
• Repair-related DV — extra loss caused by substandard repairs, structural issues, panel misalignment, or non-OEM parts.

These categories are commonly used by courts/insurers; see explanatory primers such as the NAIC paper and MWL analysis (NAIC: Auto DV Claims; MWL overview).

What to Document for an Arizona Diminished Value Claim

• Police crash report: Obtain through the investigating agency (city/county portals or LexisNexis BuyCrash). For state-patrol investigations, use the Arizona DPS records portal (DPS Records Request).
• Repair records: Estimates, final invoices, parts lists, calibrations, and pre-/post-scan reports.
• Photos: Clear pre-repair damage photos and post-repair condition photos (multiple angles, close-ups, VIN/odometer).
• Professional DV appraisal (post-repair): A written valuation showing pre-loss vs. post-repair value, comps, methodology, and the DV amount. Order a SnapClaim Diminished Value Report.

Step-by-Step: Filing an Arizona Diminished Value Claim

1. Confirm liability & claim path. If the other driver is at fault, pursue a third-party DV claim with their insurer (Arizona recognizes post-repair DV). See R.B.L.; Oliver.
2. Complete repairs or compile final repair documentation. DV is measured on the repaired vehicle’s market value.
3. Get a professional DV appraisal. VIN-specific, market-based analysis carries far more weight than generic worksheets — SnapClaim Diminished Value Report.
4. Send a written demand. Include the crash report, repair file, photos, and appraisal. Cite the Arizona cases recognizing post-repair diminution (R.B.L.; Oliver) and request payment by a date certain.
5. Negotiate using evidence. Arizona has no mandated DV formula; credible appraisals and documentation control. Insurers must comply with fair-claims standards (§ 20-461; R20-6-801).
6. Escalate if needed:
   • Regulatory complaint: File with the Arizona Department of Insurance & Financial Institutions (DIFI) (DIFI complaint portal).
   • Small claims (modest amounts): As of August 18, 2025, Arizona court materials still list a $3,500 small-claims limit; legislation signed May 2, 2025 (SB 1022) increases the limit to $5,000, expected to take effect around late September 2025 (pending rule updates). See the Arizona Courts self-help page (Small Claims) and legislative summaries (House Engrossed Summary; As Passed).
   • Civil action: File in Justice Court/Superior Court as appropriate for larger claims.

Deadlines & Special Arizona Rules

• Statute of limitations (property damage/DV): 2 years from accrual. See A.R.S. § 12-542.
• Claims against public entities: