Yes, insurance companies are required to pay diminished value in Arizona — but they will never volunteer it. Under Arizona property damage law, when another driver causes an accident, their liability insurance must make you whole. "Making you whole" means restoring you to the financial position you were in before the accident. Since your vehicle's market value dropped the moment the accident appeared on its history report, the at-fault insurer owes you that difference. This is your diminished value, and it is separate from your repair payout.
Here's what you need to know about how insurance handles DV claims in Arizona:
Third-party claims (the other driver's insurance): Arizona recognizes diminished value as a compensable loss under third-party property damage liability. This is the most common and successful type of DV claim.
First-party claims (your own insurance): If the other driver was uninsured or fled the scene, your own UMPD (uninsured motorist property damage) coverage may pay diminished value. Arizona courts have upheld these claims in some cases, though it depends on your policy language.
Collision coverage claims: DV claims under your own collision coverage are more difficult in Arizona, as many policies exclude diminished value. However, it's worth checking your specific policy language.
The reality is that insurance companies budget for DV claims but rely on policyholders not knowing they exist. Adjusters are trained to settle repairs without mentioning diminished value. At Orlando Auto Body, we make sure our customers know about their rights. Our free $450 Diminished Value Appraisal Packet gives you the professional documentation that insurance companies need to process your claim. We've been fighting for Arizona drivers for over 38 years — call any of our three locations today and let us help you collect what you're owed.