Detailed Answer
Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified attorney about your specific situation.
Under Arizona law, most auto physical damage policies include an appraisal clause to resolve disputes over loss value. When an insurer’s diminished value offer seems unreasonably low, you can invoke that clause to obtain an independent valuation. “Diminished value” is the difference between your vehicle’s fair market value immediately before the accident and its value immediately after repairs.
- Locate and review your policy’s appraisal clause. It typically appears under “Loss Settlement,” “Appraisal,” or similar headings. Note any deadlines or notice requirements.
- Provide timely written notice of your demand for appraisal. Send a letter or email to your insurer’s claims department stating that you invoke the appraisal clause to determine diminished value. Reference your claim number and the policy section. Keep a copy.
- Select your appraiser. Your policy usually allows you to choose a qualified appraiser—often a licensed auto damage appraiser or certified mechanic. Confirm any minimum qualifications your policy requires.
- Wait for the insurer’s appraiser. After you name your appraiser, the insurer must select one. If they miss their deadline, check your policy or Arizona law for extensions or a default procedure.
- Appraisers choose an umpire. If your appraiser and the insurer’s appraiser cannot agree on the diminished value amount, they must jointly select an impartial umpire. If they cannot agree on the umpire within a set time (often 15–30 days), either party can ask a court to appoint one.
- Attend inspections and exchange documentation. Both appraisers inspect the vehicle, review repair records and comparable-vehicle data, and calculate the fair market values. Transparency at this stage ensures an accurate award.
- Receive the appraisal award. The two appraisers (or appraisers and umpire) will issue a written decision specifying the pre-loss value, post-repair value, and resulting diminished value. This decision is binding under most policies.
- Insurer payment. Once you submit the appraisal award, the insurer must pay any additional amount within the period specified in your policy or under Arizona’s prompt-pay requirements (A.R.S. § 20-220).
- Next steps if insurer resists. If the insurer refuses to honor a valid appraisal award, you may have a bad faith claim under Arizona law (A.R.S. § 12-2120). Consider consulting counsel or filing in small claims court.
Helpful Hints
- Document every communication with your insurer and appraiser in writing.
- Take clear photographs of pre- and post-repair condition.
- Gather comparable listings (e.g., Kelley Blue Book, local sales) to support appraiser findings.
- Confirm all deadlines in your policy to avoid forfeiting the appraisal right.
- Consider hiring an appraiser experienced in diminished value claims.
- Keep detailed repair invoices and parts receipts to bolster your position.
Note: Insurance policy terms vary. Always read your policy closely and seek professional advice when in doubt.