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In 2023, Arizona reported over 100,000 car accidents, many of which resulted in significant vehicle damage. Regardless of how well your car is repaired, a collision can permanently reduce its market value. This loss in resale value is known as diminished value, and drivers in Arizona have the right to recover that loss through a diminished value claim.
Understanding diminished value in Arizona is crucial if you’ve been in a crash that wasn’t your fault. State laws allow eligible drivers to seek compensation not just for visible damage or medical bills, but also for the hidden financial impact that follows a car accident.
At Shapiro Law Team, we’ve helped countless car accident victims receive the compensation they deserve after a car accident. Our guide will help you understand what diminished value is, who qualifies, how the legal process works, and how to maximize your chances of a successful diminished value claim in Arizona.
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ToggleEven if the vehicle has been fully repaired, the fact that it has a history of damage typically lowers its market value. A diminished value claim in Arizona allows a vehicle owner to seek compensation for the reduction in their car’s resale or trade-in value after it’s been involved in a collision.
There are three main types of diminished value claims. Each plays a role in determining how much your vehicle is now worth and how much compensation you may be eligible to receive.
The three types of diminished value claims include:
This is the most common form of diminished value in Arizona. It refers to the loss in market value due to the mere fact that a vehicle has a prior accident history, even when repairs are performed to the highest standard.
Modern vehicle buyers rely heavily on reports from CARFAX, AutoCheck, and similar platforms to check for an accident history. Once an accident appears on one of these reports, many buyers will walk away or demand a discount, even if the car looks perfect.
This perception-driven loss in value is what defines inherent diminished value.
If repairs are not done properly, the vehicle’s value can decline even more. This loss of car value due to poor-quality repair work is known as repair-related diminished value. It often signals lingering mechanical or cosmetic issues to potential buyers.
Some insurers recommend the use of aftermarket or refurbished parts to cut costs. While these may function adequately, they can lead to insurer-related diminished value.
The use of non-OEM parts may lower the vehicle’s perceived quality and resale value, even if everything operates correctly.
Arizona law supports the right of vehicle owners to recover diminished value, even if the vehicle isn’t sold. In the 2011 case of Oliver v. Henry, the Arizona Court of Appeals confirmed that inherent diminished value is a legitimate form of compensable loss, even in the absence of a resale transaction.
The relevant legal principles that make up the Arizona diminished value law include:
Not every driver qualifies for a diminished value claim in Arizona. According to the law, only those not at fault for the accident are eligible to file. If you were responsible for the accident or signed away your rights through a settlement, you likely cannot pursue diminished value compensation.
Parties who qualify to file a claim include:
Filing a diminished value claim in Arizona involves more than simply requesting compensation from the insurance company. You’ll need to gather documentation, prove the drop in value, and follow a clear process.
Here’s how to get started:
You can determine how much compensation you should accept after a car accident by calculating the damages. However, the value of your claim varies depending on several variables, including:
While many insurers rely on tools like the 17c formula to calculate value loss, Arizona courts and consumer advocates discourage its use, noting it often results in undervalued payouts.
Instead, claimants are encouraged to work with independent appraisers who evaluate the true loss in value based on the vehicle’s condition and market dynamics.
Let’s say you have a 2021 Toyota Highlander that had a market value of $34,000 before a collision. After repairs, an independent appraiser values the vehicle at $29,000 due to its accident history.
That’s a $5,000 loss in value, and the basis for your diminished value claim. This figure is negotiable, but it must be backed by strong documentation and an expert report.
Diminished value claims often face pushback. Insurers know that most policyholders don’t understand their rights, and they use that to try and minimize payouts.
Proper preparation ahead of time can help strengthen your claim and ensure you get the compensation you deserve. Here are common hurdles and how to address them:
Insurers may undervalue your loss or reject your claim outright. Always request a written explanation and counter with your appraisal.
Use a licensed independent appraiser with Arizona-specific expertise to avoid inflated or deflated values.
Missing photos or incomplete repair records weaken your claim. Keep detailed records from day one.
Arizona law places the burden on the vehicle owner. Accurate, well-supported appraisals and thorough documentation hold the proper parties accountable.
If you’re looking for additional help filing your claim, hiring a lawyer can make a significant difference. These professionals have experience working with insurance companies and know how to fight for your rightful compensation.
While some diminished value claims can be settled directly with the insurance company, many Arizona drivers benefit from hiring an attorney. This is especially true in instances where the insurer denies the claim, offers a low payout, or drags out the process.
A personal injury or auto accident attorney can help:
Legal professionals understand the nuances of Arizona diminished value law and how to strengthen your case. This expertise often results in higher settlements and faster resolutions.
Arizona drivers have a two-year statute of limitations from the date of the accident to file a diminished value claim. This is consistent with the broader personal injury statute outlined in ARS § 12-1134.
Missing this deadline means you won’t be able to receive any compensation. If you’re approaching the two-year mark, it’s especially important to consult a lawyer to preserve your rights and explore your options before time runs out.
Insurance companies don’t make it easy to get full value for your diminished value claim. However, a smart, strategic approach can significantly increase your chances.
Here are some expert-backed tips to make sure you get a fair diminished value settlement in Arizona:
Even if your car looks great after a crash, its accident history can still reduce its resale value. In Arizona, you don’t have to accept that loss without a fight.
Our team of car accident attorneys at Shapiro Law Team is ready to join you in the fight. From filing the diminished value claim in Arizona to litigation, we’ll walk with you every step of the way to make sure you get the settlement you deserve.
We work on a contingency fee basis, meaning you don’t pay us a thing unless we win your case. Give us a call or visit our website to schedule a consultation and discuss what your legal options are.
No. Arizona law does not require you to sell your vehicle to recover diminished value. The claim is based on a loss in market value, not an actual transaction.
Yes. Diminished value claims are typically filed after repairs are complete and appraisers can assess the post-repair condition.
Unfortunately, uninsured motorist coverage typically does not include diminished value. You’ll need to consult your policy and potentially pursue a personal claim against the driver.
Yes. You can still file claims if the terms of your lease make you responsible for end-of-term vehicle value or damage disclosures. Always check your lease agreement.