Property Damage in Arizona: Frequently Asked Questions & What You Need to Know

A guide to everything you need to know
to understand the process and
deal with the insurance companies
after an accident

Prepared by Property Damage Specialists, LLC
in conjunction with
Accident Rentals Company, LLC

Chapter 1:  Total Loss versus Repair
Is my vehicle totaled or can it be repaired, and who gets to decide?
•    A car is considered a “total loss” or “totaled” if all of the costs associated with repairs, including providing a rental car for the duration of repairs, expected additions to the repair cost that will be found when the car is disassembled, is close to or exceeds the value of the vehicle.
•    If the initial repair estimate is in the range of 60 to 75% or more of the value, the insurer will ordinarily consider the vehicle a total loss.  (Each insurer sets its own percentage to determine if a car is a total loss.)  This percentage is used as the insurers know there are likely to be more damages found upon disassembly, as well as extended rental periods, which will add to the original estimate.
•    The insurance company taking care of your property damage claim is usually the one who will decide if your vehicle is a total loss or will be repaired.  However, you retain the right to override that decision, but do so at your own peril.  (See FAQ on “What if I want to repair my vehicle when the insurer said it is totaled?”)

What if I want to repair my vehicle when the insurer said it is totaled?
•    The car belongs to you – you have the final decision, but there are a few things to know before you overrule the insurance company’s decision to total your car.
•    If you choose to keep the vehicle after the insurance company said it is totaled, the insurer will pay you the Actual Cash Value (“ACV”) of your vehicle before the wreck, less the value of the salvage (typically the value of the wrecked car to be sold to an auction company).
•    Most insurers will require you to take your title to the Motor Vehicle Division and apply for a “Salvage Title,” which is a public record showing that your vehicle has been damaged to the point it should be considered salvage, before they will issue your total loss payment with you retaining the vehicle.
•    Once you follow the insurer’s instructions and get your total loss payment, you may do whatever you like with your vehicle.
•    CAUTION:  If you have a loan or lien on the vehicle, the lender may not allow you to retain your vehicle that is deemed totaled by the insurer.  The total loss check will be made payable to the lender up to the amount of your loan, and if it is not sufficient to pay off the loan, after reduction for you to retain the salvage, the lender may not allow you to keep the vehicle and continue paying the loan.  This is because the lender may not feel its loan is still secure if the security (the vehicle) is wrecked.

Chapter 2: Total Loss Issues
My car is totaled.  How do I determine my vehicle’s value?  What is Actual Cash Value?
•    These are the terms that apply if your vehicle is a total loss.  See section on “Is my vehicle totaled. . .” to get to this point.
•    What is the Actual Cash Value (ACV) of my vehicle?
o    The official definition of ACV is the amount that vehicle was worth, less depreciation. In determining the ACV, it is most often interchangeable with Fair Market Value (“FMV).  FMV is defined as what an interested buyer is willing to pay a seller interested in selling.  FMV takes into consideration mileage, condition, and other items so that it effectively depreciates the vehicle, and becomes, from a practical point, the same value as ACV.  (Exceptions to which this discussion does not apply: collector cars, classic vehicles, sports cars, or any vehicles with unique values outside the ordinary pricing and depreciation guidelines.)
o    Subject to your actual insurance policy language, most insurers pay the ACV, which ordinarily is determined by a review of comparable (year, make, model and condition/mileage) vehicles in your region or locale.
o    Now that we have the definitions, how do I know if what the insurance company is offering me is a fair value?   You need to find comparable vehicles in your local area.  Go to and look up the year, make and model of your vehicle, for a 100-mile radius from your home zip code.  You may also use any other advertised source for car sales, such as Craig’s List® or a local paper. This will give you a good idea of the price at which similar or comparable vehicles are being sold.  Then you will want to go and put in all of the information for your vehicle, including mileage and accessories, and it ordinarily provides a fairly accurate value.  Please do NOT use Kelly Blue Book® as this is more commonly a dealer tool and does not accurately reflect ACV or FMV of a vehicle, and is not accepted by insurers.  Once you have reviewed these resources, you will know if the offer from the insurer is fair and reasonable.
o    If you have just put new tires or a new engine or done a major repair to your vehicle, you may be frustrated because the insurer does not use that to add any significant value to your vehicle.  Unfortunately, the vehicle values assume that everything is in good working condition, and even major items that are wear and tear or ordinary replacement do not significantly increase the value.  Those items may be used to show excellent mechanical condition to provide a minor increase, but will not make a big difference in your value.
•    See other sections for questions on who should handle the claim (your insurer or the other), and what is covered.

My vehicle is totaled.  Should I use my collision coverage or the at-fault driver’s insurance coverage?
•    Using Your Insurance:
o    If you do not have collision coverage, you have no option but to wait for the other driver’s insurance to handle your claim.
o    If you are at fault for causing the collision, you have no option but to use your own collision coverage as no one else is going to provide that coverage.
o    Your insurance company has a duty and obligation to deal with you fairly and in good faith, because they have a contract with you and you paid them premiums for this coverage.  The other person’s insurance company does not have this same duty of fairness to you.  If all other things are equal as far as what is covered, you have more rights when dealing with your own insurance company.
o    Arizona law (ARS Section 20-263) prohibits an insurance company from raising your rates for an accident that is not your fault, and for which your actions were not a significant contributing cause.  If they raise everyone’s rates, they can raise yours, but they cannot rate you higher to raise your premiums due to making a claim.
o    Your insurance company will pay you under the terms of your insurance contract, less your deductible.  Sometimes your own insurance might have a limit in what it pays, examples: 1) your insurer may have a limit on stereo equipment or not pay for non-factory equipment; or 2) a motorcycle policy might only pay up to $1,500 for accessories or after-market upgrades and equipment, and if you have added saddlebags and had a custom paint job, the value of those items may be a lot more than is covered by your insurer.
o    Unless there are limits that significantly reduce your coverage, you may want to consider using your coverage without waiting for the at-fault insurer.
o    You have a duty to mitigate (keep as low as possible) your damages.  Thus, if you have collision coverage and the other insurer has not completed its investigation, you must start the process of handling your vehicle claim through your insurance.  If you choose not to do so, the at-fault insurer can refuse to pay for the extra days in which your vehicle is in a towing/storage yard when you had the ability to get your insurance company to start the process, or it may refuse to pay for excess rental days.
o    Other than any limit restrictions, the only negative to using your own coverage is the deductible.  If your vehicle is repairable (not totaled), then you will have to pay the deductible to the body shop when the repairs are complete.  Likewise, if it is totaled, the amount paid will not include the deductible, but in that event, you can still recover the deductible from the at-fault insurer (assuming the accident was not your fault).
•    At Fault Person’s Insurance (not yours):
o    If the other person’s insurance has accepted liability (fault), and is ready to take care of your vehicle, you can go ahead and have them inspect it, determine its value, and handle the total loss.
o    Benefits of using the other person’s insurance even if you have collision coverage:
If you are unhappy with their value, you can switch to your insurance company and get a value from both to compare, and take the higher.
If you do not have rental coverage, the other insurer may put you in a rental car while it is handling your property damage claim.
If your vehicle is being repaired, you will not have to come up with the deductible when the repairs are complete.

My vehicle is totaled.  What is covered – value of vehicle, personal property, safety equipment, rental car, loss of use?
•    If your vehicle is totaled, the claim for your vehicle will either be handled by your own insurance under your collision coverage, or if you were not at fault, you have a choice of handling it through your own insurer (if you have collision coverage) or having the at-fault person’s insurer handle it.  Each has a few different rules.
•    If you are dealing with your own insurance company under your collision coverage:
o    The terms of your actual insurance policy provide how a vehicle is to be valued for payment, and most often the policy provides for payment of the Actual Cash Value (“ACV”), although some policies provide for a one model year newer value, or a replacement new vehicle if your car is less than one or two years old (as defined in the policy itself), and some less common policies have an agreed upon or stated value, usually for unique, classic or custom vehicles.
o    Your insurance policy almost certainly has a provision for an appraisal process if you disagree with the ACV provided by your company.
o    Payment for personal property items, such as motorcycle helmets, upgraded stereo equipment, after-market upgrades such as lift kits or wheels, may be limited by the policy language.
o    A rental car if you have purchased separate rental coverage.  Through your own insurer, you are not entitled to a comparable or similar vehicle to the one that is totaled, but it is usually an amount up to a flat daily rate, and you must meet the rental agency’s requirements to actually get that rental, i.e., credit or debit card, and/or cash deposit.
•    If you were not at fault and are dealing with the other person’s insurance, that insurance company is generally required to pay the following, up to its available policy limits:
o    A person who negligently damages property of another is required to replace that property, or pay the reasonable value for its replacement with a similar or comparable item.
o    That value the insurer needs to pay is essentially the Fair Market Value (“FMV”) of your vehicle, considering the year, make, model and condition/mileage of the vehicle, including all upgrades, after-market equipment, at their current or depreciated value, not their cost.  FMV is often interchangeable with ACV (Actual Cash Value), as both rely on mileage, condition, and similar factors to depreciate the vehicle from its original condition (ACV), or compare currently available vehicles to ascertain the current value in today’s marketplace for a similar vehicle (FMV).
o    For a comparable rental car to the one damaged.  If you were in a truck, the insurer needs to pay for a rental truck for you.  Insurers will try to tell you that they only look at the number of seats, so if you had a five-person vehicle, they need only provide a five-person vehicle, but they actually are required to put you in the position most closely to that you would have been in had the accident not occurred.  If you were on a motorcycle, since motorcycle rentals are not readily available and often a rider is not able to ride after a collision due to injuries, a car is ordinarily provided.
o    If a rental car is not provided, then the insurer will need to pay you for “loss of use,” which is the cost at which your vehicle or a similar vehicle would ordinarily be available for rent.  Check to see what a vehicle the size of yours would ordinarily cost to rent (call some local rental agencies), and the insurer will need to pay you this amount until they make an offer for your total loss, or until your vehicle repairs are completed.
Can I dispute the amount the insurer offers for my total loss, and if so, how?
•    Yes, you can dispute it.  You will do so either through the at-fault person’s insurer, or your own, with different rights for each.
•    Through the other at-fault person’s insurer:
o    You have NO right to an appraisal.
o    If you believe they have unfairly valued your vehicle, you will need to request a copy of the insurer’s valuation and review it carefully to see where errors are made.  Some common things you can find and for which you can argue for a change in value:
Mileage is wrong on the valuation.  Notify them of correct mileage.
Options are missing.  Notify the insurer of the options that were omitted.
Comparables are lower than anything you can find available in your area.  Check the actual comparable vehicles and call the owners or dealers to find out if it sold, what was wrong with it, or get other details to show how it is not comparable to your vehicle.  (We have found through these calls that sometimes the comparable vehicles were not running, needed a new transmission, or had other significant defects that rendered them not comparable.)
Provide other valid comparables that you have been able to locate through Auto Trader®, CraigsList®, or other local resources.
•    Through Your Own Insurer:
o    You almost certainly have an appraisal clause in your policy.  It makes no financial sense to invoke the appraisal clause unless the offer is more than $500 too low, and to really be beneficial, the deficiency should be closer to $1,000.
o    Before invoking the appraisal clause, try to negotiate.  Use the same factors and tactics noted above for the at-fault person’s insurer.  Get a copy of the valuation document and carefully review it to determine what is wrong.
o    You have the right to demand payment of the offered amount (called the “non-disputed amount”) pending negotiation or appraisal.  Thus, even if you are unhappy with the offer from your own insurer, while you are deciding whether to go through the appraisal process, you can demand payment of non-disputed amount in writing.  Your insurer can require you to sign over your title, but make sure you notify them in writing before handing over your title that you are disputing the amount.  The insurer may also seek to deduct the salvage value (amount for which they could sell the salvage) and hold that from the non-disputed amount, but you can tell them they already have the salvage, and argue against this, sometimes successfully, sometimes not, but it is worth asking.  If they insist on withholding the salvage value from the non-disputed payment, ask for their policy language allowing them to do so, or the legal basis for their position.
o    If you need to go through the appraisal process, because the value is too low, then read your policy.  Most require that you provide a written letter demanding the appraisal and identifying (name and address and phone) your appraiser.  The insurer then names its appraiser, and the two select an umpire, if the two cannot agree on a value, a decision by any two including the umpire determines value.  (There are some variations to the specific language.)  You have to pay for your appraiser and one-half of the umpire’s charges.  This process ordinarily takes 1-2 months, but remember to ask your company to pay you the non-disputed amount while the appraisal process is pending.  Do not allow the insurer to name one of its own employees as the appraiser – that does not allow for an independent appraisal.
o    If you need a referral to a competent appraiser, please call Accident Rentals.

Do I get paid for after-market upgrades to my vehicle, such as a stereo or sound system, or a truck lift-kit, or custom wheels, or custom motorcycle paint?
•    Your own insurance:
o    Your policy may have specific language that says how much of upgrades or optional equipment can be covered, or limits those amounts.  Your own policy terms will dictate what is paid or not paid.
o    If there is no specific limiting language, then your policy should pay the fair market value for the upgrades. That fair market value will not be what you paid for them, but rather, how much increased value those upgrades or alterations bring to your vehicle.  (See comments below for the at-fault insurer as to how these are valued absent specific policy language.)
•    At-fault insurer:  The insurer for the at-fault person has to pay for your upgrades, but they are not valued at cost.  Rather, they are valued by how much value they add to your vehicle.  For example (examples are general and may not apply in every situation):
o    If you have a lift kit professionally installed on your truck, and lifted trucks of the same year, make and model are worth $2,000 more than those without lifts, you are entitled to that $2,000, regardless of whether that lift kit cost $700 or $5,000, and regardless of whether it was installed the day before the accident or years ago.
o    If you alter your vehicle to a low-rider, even if you pay significant funds to do so, it may actually decrease the resale value of the vehicle, and not add any value.
o    Custom paint jobs on motorcycles are often personal and quite expensive, but add no real value to the motorcycle.  This is a highly disputed area.
o    Stereo and speaker/sound systems do add some value to the vehicle, but rarely at anywhere near the cost of the system.  Thus, if you are not happy with the value added by the insurer for your custom sound system, you can always ask them for permission to remove and retain the sound system.

What is GAP (Guaranteed Asset Protection) and how does it work/how much does it pay?
•    GAP coverage is an insurance-type plan that is only used if your car is totaled, and if your loan amount is higher than the Actual Cash Value of your totaled vehicle.  If those things occur, GAP pays the amount necessary to pay off your car or truck or motorcycle loan, subject to a few requirements and items that are not paid.
•    Each GAP agreement is a legal contract, and the actual terms of your GAP document will cover the specific items that are paid.  The information below is a general overview of how most GAP plans work, but your terms may differ.
•    GAP is most often sold by a car dealer, but a few major insurance companies have begun to offer GAP coverage on their automobile insurance policies.
•    GAP can be purchased on a new car (whose value drops significantly when you drive it off the car lot), or on a used car.
•    How does GAP typically work?
o    If you have GAP coverage, as soon as you find out your vehicle is totaled, you should report it to your GAP plan to start the process, as it ordinarily takes up to 30-45 days to complete.
o    The GAP plan typically sends out paperwork requesting information that includes:
Proof of the accident, such as a police report,
Proof of total loss (estimate from the tow yard or offer from the insurance company),
Loan payoff statement from your lender (bank or finance company), and
Complete payment history from your lender, to verify any unpaid payments or late charges that are included as part of the payoff.
o    You may want to go ahead and request each of these items while you are waiting for the GAP documents to speed up the processing of your GAP claim.
o    Once the GAP plan has processed your paperwork, they will pay off any balance of the loan to the lender, subject to offsets or terms limiting the amount paid.
•    How much will GAP pay, or what items are not paid?  GAP typically pays the full difference between the loan amount and what you receive from the insurance company for your actual cash value (“ACV”), except the following:
o    Your deductible, which will only apply if you are using your collision coverage, not if the other person’s insurance is paying for your vehicle.
o    Any late payments or deferred payments or late payment fees on your loan.  They will only pay the amount that should be owed if all payments were made on time.
o    Some GAP contracts have a limit on the most that will be paid, i.e., $3,000 or $5,000 or some stated limit, and regardless of the loss, will not pay more.

Chapter 3:  Repair Issues.
What are the pros and cons of using your own choice of body shop instead of an Insurance Company’s Guaranteed or Preferred or Designated Repair Facility/Body Shop (commonly called DRP or DRG for Designated Repair Provider or Group)?
•    Benefits of Choosing Your Own Body Shop:
o    A private body shop that is not a DRP works for you, and derives its business from individuals, not insurance companies.  As a result, their primary income source is you, the customer, not the big insurer.
o    You can rest assured the body shop will look hard for damage that is unseen from an exterior view, regardless of cost.
o    The shop has no contract with or directive from the insurer requiring it to use after-market equipment, and can use the manufacturer’s original parts, ensuring the best possible return of your vehicle to its proper condition.
o    If you have an overriding reason to want your vehicle repaired instead of totaled (i.e., you are upside down on your loan with no GAP coverage), your own shop may be able to work with you to use some safe reconditioned parts to get the repair cost low enough that your vehicle is not totaled.
•    Benefits of using a DRP:
o    The insurance company guarantees the repairs to be carried out within industry standards, and the insurance company will require the DRP to make additional repairs to bring the vehicle up to standards.
o    The guarantee on the quality of repairs will last for the duration that you own the vehicle.
o    The insurance adjuster will often approve additions or changes to the original estimate automatically, without the necessity of a re-inspection, which sometimes speeds up the total repair time.

Chapter 4:  Diminished Value
Is my vehicle worth less than it was before it was wrecked and repaired, and if so, can I get paid for that?
•    The short answers are 1) probably (it is worth less than before being wrecked and repaired) and, 2) sometimes (you can recover this amount).
•    This loss is called “Diminished Value.”  See the section on Diminished Value for complete details on DV, when you can recover it, and how to make your claim.

What is Diminished Value (“DV”), How is the Amount Calculated, and How Can I Make a DV Claim?
•    Diminished Value (“DV”) is the reduced value of your vehicle as a result of its being wrecked and repaired.  Everyone knows that a car that has been damaged and repaired is worth less for resale than the same vehicle that has never been wrecked.  Everyone has access to CarFax® and similar services, and anyone with experience can check part numbers and inspect the vehicle and ordinarily determine if the vehicle has been involved in a significant collision.
•    So your car got hit, it was repaired and looks and runs like new, so who is going to pay you for that loss in value that you won’t even experience until you resell your vehicle?
o    If the accident was not your fault, the at-fault person is obligated to pay your DV claim.  (See below in this same section for how to determine this value and make the claim.)  Technical information and limitations to your ability to recover this:
Technically, it is the negligent driver who is obligated to you for this loss.  That person has hopefully purchased insurance coverage to pay for his negligence, and it is thus likely to be the insurer you are dealing with to make this claim.  (If there is no insurance, the likelihood of recovering this is minimal, absent the person being independently wealthy or on a job-related errand at the time of the negligence, which brings in other insurance coverage.)
Since in almost every case, from a practical standpoint, you are dealing with an insurance company and its insuring policy that has limits on the total amount it may pay (called “policy limits”), the value of the claim is limited by the amount of property damage liability coverage the at-fault driver had in place at the time of the collision.
“Property damage liability” limits cover everything related to all of the not-at-fault vehicles in the claim (if there are more than you as the innocent victim).  This includes repair costs, total loss payments, rental car, loss of use, and personal property items damaged or destroyed (including safety gear such as car seats and helmets).
Arizona currently requires a minimum of $10,000 in property damage liability coverage.  If the person who hit you has only this minimum $10,000 in coverage, and you have $8,500 in damage to your car, a towing and storage bill of $300, and a rental car expense of $1,000, there is only $200 left for your diminished value claim.  Your DV appraisal will cost more than this.
Before you spend money to get that DV appraisal, make sure you know if the property damage liability limits are going to be enough to get your DV paid.
If you have had the repairs done through your own collision coverage and not the at-fault insurer’s property damage liability coverage, then you can insist that your insurer allow you to recover your DV claim before your insurer is reimbursed for its collision expenses.  (This is going to be an uphill battle, and will be hotly contested.  If you have an injury attorney, they should be willing to assist you with protecting your rights.)
o    If the accident was your fault, unless your policy has a rare provision to pay you for DV, you won’t get paid for this.
•    How much is my DV claim?
o    The DV claim is established by a qualified appraiser who can review the ordinary value of your vehicle, inspect your vehicle post-repair, review the repair invoice, and provide you with an expert opinion as to the reduced value.  The cost for that personal appraisal will vary, most often in the range of $200-$500.  An appraisal with a personal inspection has far more weight in your negotiations than the one-size-fits-all mathematical computation form opinions that can be purchased for a smaller fee on-line.  If you are going to go to the trouble to present and negotiate your DV claim, do it right with a qualified appraiser.
o    The factors that determine the amount of your DV claim ordinarily include:
What is the age of your vehicle?  (Older car values are less influenced by automobile accidents than newer vehicles.  For example, some insurers have been known to take the position that there is no DV claim for a vehicle more then seven years old.)
What is the original value of your vehicle?
What was the current value of your vehicle before the damage, including factors for condition, mileage?
Higher priced or luxury vehicles have larger DV claims, as do newer model years.
What is the quality of repairs?
•    Can a visual inspection reveal that repairs have been made, or is the older part of the paint faded to where it doesn’t match the newer area?
•    Were aftermarket parts or original manufacturer parts used?  (Remember the insurer’s guaranteed repair facilities like to use those aftermarket parts that save their insurers money, but those may increase the DV claim.)
What is the cost of the repairs?  The higher the cost for repairs, the higher the DV claim will be.  A $1,000 repair to a bumper is not likely to result in a significant DV claim, but a repair bill of $5,000 can result in a sizeable DV to your vehicle.
Has your vehicle been previously wrecked and repaired?  If so, you are unlikely to get much, if any, DV, as the insurer will claim that the diminishment in your value was caused by the prior accident, and no further diminishment occurred as a result of a second collision in the same vehicle.
The DV amount will be highly disputed by the insurer.  Some insurers use flat rates (i.e., all DV claims are 10% of the cost of repairs, and then multiply that by a factor that accounts for the age of your vehicle) that are inaccurate; others deny payment of any DV claims, and most do so with the comfort that people don’t hire attorneys to pursue DV claims.  The dollar amounts of DV claims rarely reach the levels where attorneys will litigate them on a contingent basis.  Expect to have the diminished value disputed; and be prepared to demand the insurer give you expert appraisal support for its position.
o    If you have questions about whether a DV claim should be made, or if you need to hire an independent adjuster to negotiate when an insurer refuses to pay, contact Accident Rentals and they will assist you in making a preliminary contact with a qualified DV appraiser to determine if a DV claim is appropriate in your specific situation, and with an appropriate independent adjuster or attorney if the situation warrants it.

Chapter 5:  Insurance: Coordination of Coverages, Timing, Deductible
How long can the insurance company take to investigate before it has to take care of my claim?
•    Insurers have thirty days to complete their investigation to determine liability (who was at fault).  They can extend this time for any good reason, and common reasons include:
o    Delay in availability of police report.
o    Inability to contact a driver or witness.
•    Once the insurer makes it liability decision, if they accept fault, they should be ready to promptly handle your property damage (total loss or repair) claim.

Will my insurance rates go up for using my insurance?
•    Arizona law (ARS Section 20-263) prohibits an insurance company from raising your rates for an accident that is not your fault, and for which your actions were not a significant contributing cause.  If they raise everyone’s rates, they can raise yours, but they cannot rate you higher to raise your premiums due to making a claim.
•    If the accident was your fault, the insurer can raise your rates.

I used my own insurance and the accident was not my fault.  When will I get my deductible?
•    If the at-fault driver carried a valid insurance policy, the other company should pay your deductible to you as soon as its investigation is complete and it has accepted liability (fault).
•    Your insurance company will ask the other insurer for it, and you can wait for your insurer to collect it and pay you, or you can make the claim directly to the at-fault insurer.
•    Be sure to include your loss of use, rental reimbursement, personal property, and/or diminished value claims to the at-fault insurer before you sign any property damage release.
•    If you have an attorney, make sure your attorney is seeking your deductible and any loss of use, rental charges, personal property items, diminished value, or any other property damage items not covered by your insurance, on your behalf.

What happens if the insurance company says it does not have enough coverage limits to pay for my vehicle repairs or total loss value?
•    The minimum property damage liability coverage required in Arizona is, as of the writing of this guide, $10,000 per accident.
•    The at-fault driver may have minimum coverage, or may have a higher limit.
•    For example, if your vehicle is totaled and its value (including tax and license fees) is $15,000, the at-fault insurer would only pay $10,000 to cover your vehicle, rental and any other personal property items damaged or destroyed.
•    Thus, if your total damages exceed the amount of insurance coverage, you should use your own collision coverage (if you have it); otherwise, you are not going to get the full value of your vehicle and rental, loss of use and personal property claims (together called your “property damage claims”).
•    If there is more than one not-at-fault vehicle in the collision, i.e., a three-car accident, and your property damage claim (repair or total loss, plus rental, and any other property damage claims), combined with the other not-at-fault vehicle property damage claims, exceeds the policy limits, then the policy limits will be prorated between you and the other not-at-fault vehicle(s).  In that event, you should use your own collision coverage if you have it.
•    If you do not have collision coverage on your own insurance policy, you are going to have to accept the prorated or reduced amount, or file suit against the other driver to recover the excess damages.  Unfortunately, those lawsuits often cost more than you can recover, and are not economically feasible.  Likewise, if you do not settle with the insurance company, they won’t pay even your pro-rated amount until the lawsuit is finished.  Most of us cannot wait for a lawsuit to be finished to get any funds.

If the at-fault insurer says they do not have enough limits to reimburse my company for collision coverage, does that eliminate or reduce my rental, loss of use, or diminished value claims?
•    This is an excellent question, and one that is hotly disputed as between insurance company adjusters, and private adjusters or attorneys on behalf of the person who sustained the loss.  To understand the two sides of this coin, you will need to understand what happens behind-the-scenes between the insurance companies.
•    Let’s use an example:
o    Mary’s newer car, with an actual cash value of about $25,000, was rear-ended by a truck, and sustained $9,000 in damage.
o    The truck only had Arizona minimum coverage with $10,000 in property damage liability limits.
o    Mary’s property damage claim includes all of the following:
$9,000 repair bill for her vehicle.
$1,500 rental bill for the duration of her repairs.
$4,500 diminished value per appraisal.
Mary’s total property damage claim was $15,000
o    Mary had collision coverage and rental coverage on her car, so her own insurance paid the $9,000 repair bill and the $1,500 rental bill, except for the $500 deductible that Mary paid to the body shop, for a net paid by her insurer of $10,000.
o    Mary’s insurance company paid $10,000, and would like to get its $10,000 back from the truck’s insurer.  Mary’s insurer has a right to seek subrogation from the truck’s insurer, which is the right to make a claim for reimbursement.
o    Mary is still owed her $500 deductible and her $4,500 DV claim, for a total of $5,000.
•    In this example, the truck’s insurance company only has $10,000 in coverage, but they have claims of $15,000.  Who gets how much of the $10,000? Ordinarily:
o    Mary’s insurer allows the payment of Mary’s deductible to her, so she gets $500 off the top, leaving $9,500.
o    Mary’s insurer then wants the rest of the claim to be pro-rated, so that Mary would get only approximately 2/3 of her $4,500 diminished value claim (about $3,000), and the insurer would get approximately 2/3 of its $10,000, (about $6,500).
o    Both insurance companies love this plan:
The truck’s insurer gets the claim finalized quickly and closes its file.  It really doesn’t care to whom it pays the $10,000; it knows it has to pay its full amount; but going along with Mary’s insurer is the fastest way with the least effort to get this done.  (As a non-insurance person, one has to wonder about the next time these two insurers meet, and the innocent person gets the short deal while the insurance companies just hand money back and forth to each other.)
Mary’s company recovers $6,500 of its $10,000 paid out, because they effectively kept $1,500 of Mary’s money.
o    How it should work, and with the correct arguments by an independent adjuster or savvy attorney, can and should work:
Remember Mary paid her insurer for her collision coverage.  Her insurance company has a right to subrogate for recovery of the $9,000 repairs and $1,500 rental against the other insurance company, less Mary’s deductible.
Mary’s insurance company also has an obligation to deal with her fairly and in good faith because she has a contract with them, and pays her premiums to them for this insurance coverage.
Mary’s company must allow her to be paid back her outstanding items, in the example for her DV claim, before it recovers its collision and rental payments, although they won’t usually voluntarily do so.
For Mary’s company to do anything less is for Mary’s company to reduce her collision coverage to less than the full coverage she paid for, because her company is getting those collision dollars back as a direct penalty to Mary’s other rights to recover.
Thus, Mary’s company should allow the truck’s insurer to pay her the $500 deductible; and then the $4,500 DV claim; and then Mary’s company would receive the $5,000 left in the truck’s $10,000 policy limit.
o    When this argument is correctly presented, Mary’s company risks a bad faith legal claim for failure to allow her to be made whole before it is reimbursed, a wrong application or improper reduction of its collision coverage, both of which have serious financial consequences to the insurer.
o    Other benefits of notifying Mary’s insurer of their obligations to allow the truck’s insurer to pay her first:
The DV amount is almost always highly disputed.
Since Mary’s claim is against the truck’s insurer, only the truck’s insurer has the right to dispute the amount of that claim.
The truck’s insurer does not care to whom it pays its $10,000 limits, so Mary is in the unusual position of having the full value of her DV claim non-disputed.
If Mary’s insurer tries to dispute her claim against the truck driver and his insurer, then Mary’s insurer is acting contrary to Mary’s best interests in her pursuit of her independent claim against the truck driver and his insurer.  Thus, Mary’s insurer cannot dispute the DV amount unless it wishes to subject itself to liability for wrongfully interfering with her claim.  In technical terms, Mary’s insurer lacks standing to dispute the DV value.
If presented correctly, Mary (or the next person in Mary’s similar circumstances) will have eliminated the challenges to the amount of her DV claim, and recovered her DV claim at 100%.
•    If this all seems complicated, it surely can be.  Contact Accident Rental Cars for a referral to a competent appraiser, independent adjuster, and/or attorney to assist you with your DV needs.

I traded in another car or put a down payment on my car.  The insurance company paid my total loss claim, but it did not provide enough money for a down payment on a replacement vehicle.  Is there anything I can do to get my down payment back?
•    Unfortunately, no.  Arizona law only requires that the fair market value or actual cash value of the damaged personal property item be paid.  This does not include adding money to it to actually get you refinanced into a replacement vehicle.
•    With difficult economic times, this is a crisis for many people who previously took their vehicle ownership for granted.  Many who could qualify a year or two ago can no longer qualify for a loan due to changes in jobs or earnings, even if they have a down payment.  There is not a good solution presently available.   We remain hopeful that a law firm is going to take on the task of including this damage as a realistic direct and proximate result of the negligence of the at-fault party, and develop some case law that will expand to better cover these losses and hardships.
•    In the meantime, if you have a personal injury claim associated with your accident, please make sure your attorney knows of the hardship to you and your family caused by the inability to replace the vehicle as this is another factor in the general “pain and suffering” category of damages that is caused by the at-fault driver.

I didn’t pay my insurance bill on time, and my insurance coverage lapsed for non-payment.  I did not have insurance at the time of the accident, but I had a loan on my car.  Is there anything else that might help?
•    First of all, please immediately check the payment due date.  You have a grace period and mandatory notification before your policy is canceled and cannot be reinstated without a lapse in coverage.  Immediately get legal advice as to the time for payment and see if you can pay in person, in cash, to keep your policy in force without a lapse.
•    If it has lapsed and cannot be reinstated to cover as of the date of the collision, often a lender (bank or finance company) will have what they call “force placed coverage” or something similar.  This means that if your insurance lapses or expires, the lender puts you on its big umbrella policy to cover its loan.  It does not cover your vehicle, technically, but might pay off the loan in the event of an accident where your car was totaled.
•    This is a very technical legal area, and if you have questions, you should seek advice from an injury attorney. The attorney will need to see all of your loan documents, and likely have an authorization from you to communicate with your lender.
•    Most attorneys will charge hourly for this work, but if you are injured in that accident and it was not your fault, it is a fair request from you to your attorney to help you with these communications as a part of your injury case.
•    If you need assistance to determine status of your original coverage or any potential force placed coverage, please contact Accident Rental Cars who can refer you to an independent adjuster or attorney who can assist in these areas.

Chapter 6:  Abandoned Title.
I received an Abandoned Title notice from the Motor Vehicle Division.  What does this mean, and what do I need to do?
•    If your vehicle was towed to a tow yard or storage facility, the tow yard may apply for an “abandoned title.” You will receive a notice from the Motor Vehicle Division at the address listed on your registration.  Your vehicle must be removed from the tow yard prior to the expiration of the 30-day notice, or the title will “abandon” (be transferred) to the towing/storage facility.  If the abandonment occurs, you will also have a $500 fine assessed through the Motor Vehicle Division, and that assessment will impact registrations and drivers’ licenses for the person(s) named on the title, until it is paid.  It is best to avoid the abandonment process.
•    You have a duty to “mitigate” your damages.  “Mitigate” means that you must take all reasonable steps to keep the financial costs associated with the accident at the best cost available under the circumstances.  If you have insurance that can deal with property damage (collision coverage), you must use it.  If you have a place you can move your car while the insurance companies sort out the details and complete their investigation, and you are able to pay for the towing and storage and to move the vehicle, you must do so.  If you do not mitigate your damages, the insurance companies may only have to pay for the amount that would be owed if you had taken reasonable steps to do so.
•    If you have collision coverage on your insurance policy, have your insurance company start the process of handling the property damage immediately so you mitigate your damages.  Your collision coverage should pay everything except the deductible.  Your insurance company should be reimbursed by the at-fault insurer in most instances, if there is coverage and once liability/fault is determined favorably.
•    If you do not have collision coverage on your insurance policy:
o    If the at-fault insurer has accepted liability, release the vehicle to them and let them move it from the yard, either to your chosen body shop, or if it is a total loss, to the insurer’s storage-free lot.
o    If the at-fault insurer has NOT accepted liability, or you don’t know who is the at-fault insurer or if there is insurance coverage, your duty to mitigate damages is critical.  Get the vehicle out of the storage yard if you have any ability to do so.
o    The at-fault insurer (if we know who it is) is allowed up to 30 days from the date it is notified of the claim to complete its investigation, and can take longer if there is any basis to do so (i.e., police report is not ready, or they cannot reach their insured or a key witness).  They often complete their investigation sooner, but are not required to do so.
o    Most insurers will complete their investigation either after speaking with their insured and confirming the facts (if their insured admits it was their fault), or after receipt of the police report and a few days to contact any witnesses for details.
o    Keep a close eye on the abandonment date.  If fault is not accepted by the at-fault insurer in a timely manner or the collision was your fault, to prevent the abandonment, you can:
Ask the tow/storage yard to accept your vehicle as payment for the towing and storage charges (only a viable option if the vehicle is totaled). The tow yard does not have to do so, but often will.  Sometimes the tow yard will accept the vehicle as partial payment, and you will still owe some additional funds, but can avoid the abandoned title $500 fine by signing over your title.
Have it moved from the yard to a place of your choice (home or body shop), but you may have to pay the accrued towing and storage charges to do so, and it may continue to accrue storage charges at the body shop.
•    If you leave it in the tow yard, they will become the owners through abandoned title, and you will have a $500 fine assessed against the registered owners through the M.V.D.

Chapter 7: Rental Car/Loss of Use/Who Pays/Solutions
Who pays for a rental car while mine is being repaired or, if it is totaled, until I can get a replacement vehicle; and how long can I keep the rental car?
•    If you have rental coverage on your own policy, and your insurer is handling your repair or total loss claim, then your insurer will pay for your rental car.  This is ordinarily done in one of two ways:
o    Direct bill:  The rental agency has a direct billing arrangement with your insurer:
The rental agency submits the bill directly up to the full amount of your coverage (i.e., $25 per day for up to 30 days).
Most rental agencies require that you have a credit or debit card to guarantee payment of any non-covered amounts (i.e., gas or damage to the vehicle), or a significant cash deposit.
o    Reimbursement:  You pay for your rental car and your company reimburses you up to the amount of your coverage.
•    If you don’t have a credit card or debit card, or can’t prepay and get reimbursed, call Accident Rental Cars for your other options.
•    TIME LIMITS to keep rental car:  This varies by whether it is your policy or the at-fault insurer is paying for the rental:
o    Your own policy: Most people with rental coverage on their policy have a thirty days limit with a particular value per day, i.e., $25 per day for 30 days.  Unfortunately, this does not mean that you automatically get to keep your rental for 30 days, as the policy language ordinarily limits the rental payment until your company has made an offer to pay you for a total loss or the duration of your repairs.  Most companies will limit the rental to 2 to 5 days from the date they make a total loss offer, or until the date your repairs are completed.  Thus, you must be prepared to turn in the rental car or take over payment for it shortly after an offer is made, regardless of whether you have agreed upon the value, or payment has been received.
o    The other insurer:  The at-fault insurer has to pay for the rental until it has reasonably paid for the total loss or the duration of the repairs, so long as you have not taken any steps to slow down the process.  Like your own insurer, they will seek to terminate your rental payment 2 to 5 days from the date they make a total loss offer, or on the date your repairs are completed.  Again, you must be prepared to turn in your rental car or take over payment for it shortly after an offer is made regardless of whether it is a fair offer.

I have rental coverage on my car.  How does that work or what do I need to get a rental car?
•    If you have rental coverage, a rental car should be offered to you as soon as you notify your insurer of the accident, if your car is not drivable, or for the duration it is in the shop for repairs if it is drivable.
•    If your insurer did not offer the rental coverage, they should make the arrangements as soon as you ask them.
•    Some provide the rental on a reimbursement basis, where you pay for the rental and they reimburse you; and others set it up as a direct bill:
o    Direct bill:  The rental agency has a direct billing arrangement with your insurer:
The rental agency submits the bill directly to the insurer up to the full amount of your coverage (i.e., $25 per day for up to 30 days).
Most rental agencies require that you have a credit or debit card to guarantee payment of any non-covered amounts (i.e., gas or damage to the vehicle), or a significant cash deposit.
o    Reimbursement:  You pay for your rental car and your company reimburses you up to the amount of your coverage.
•    If you don’t have a credit card or debit card, or can’t prepay and get reimbursed, call Accident Rental Cars for your other options.

I do not have rental coverage on my car.  How can I get a rental, with or without a credit or debit card or cash?
•    Unfortunately, if you were at fault for the collision, there is nothing that can be done to get a rental car for you.
•    If you were not at fault, you ordinarily have to wait for the at-fault insurance company to complete its investigation before they will begin to pay for a rental car.  After investigation, the insurer should either provide the rental on a reimbursement basis (you pay first then they pay you back), or a direct bill where they arrange the rental through a rental company.  Even then, you ordinarily have to have a credit or debit card or cash deposit for the rental agency to get your vehicle.
•    If you were injured and it was not your fault, Accident Rental Cars may pre-qualify you for a rental with no deposit, with no credit or debit card, and without waiting for the final investigation.  Call 602-980-6698 or go to to prequalify.

What happens if I have not been able to get a replacement car before my rental authorization expires?
•    This is a very common problem.  You are injured, it wasn’t even your fault, and while you are still suffering, you have to make a major financial decision:  what vehicle should I get, how much can I/should I spend, where should I purchase it, and what financial terms are acceptable?  It doesn’t matter if you aren’t even released to return to work yet, and don’t want to make a financial commitment when you don’t know how long your injuries will keep you off work.  It doesn’t matter if you can’t get financing because you are currently off work due to your injuries.  The insurer cancels your rental authorization and refuses to pay further, regardless of the impact on you.
•    Your options are limited:
o    Keep paying for the rental car at your own expense, either with your debit or credit card or for cash;
o    Make a too-fast decision on the replacement vehicle.
o    Go without a car until you can find the right deal at the right price and terms.
•    If you get caught short, your rental car is due to be turned in before you get your replacement vehicle, and you meet the criteria for a rental car through Accident Rentals (injured and not your fault), they may be able to place you into a rental for an extra few weeks while you find your replacement vehicle.  They will wait for payment from your injury proceeds, so those funds effectively are paid by you, but deferred until your injury claim settles.

I did not get a rental car.  Does anyone owe me for the loss of use of my vehicle while it was being repaired or until I am paid for the total loss?
•    If you were able to do without a rental by sharing family rides or had an extra vehicle, your insurance coverage won’t reimburse you for the money they saved, but the at-fault insurer is obligated to pay you “loss of use” if the accident was not your fault.  Loss of use is the fair rental value for a comparable vehicle, which is to be paid from the date of the collision until the date repairs were complete or your vehicle total loss was paid (or at least offered to be paid).
•    Be sure to notify the at-fault insurer in writing that you are making a claim for loss of use before your total loss or repair claim is settled.
•    How much should you ask for as a daily loss of use rate?  Check with a couple of local car rental agencies for a vehicle similar in size to the one in the wreck, a daily rate, and find out the rental cost including tax for that comparable vehicle.  This is the amount you will ask for, and you will use that company’s rate to support your demand.

What do I need to get a rental car from Accident Rentals Company?
•    Accident Rentals’ qualifications are simple:
o    Were you injured in an accident?
o    Was it not your fault?
o    Does it appear there is insurance coverage available, either from the other person or your own insurer, for your injuries and/or property damage?
•    If you meet these simple qualifications, to finalize the rental, Accident Rentals will need:
o    Valid Arizona driver’s license.
o    Proof of your insurance (either on your vehicle or that you are a named insured on a family member’s policy; you must have some policy of liability insurance)
o    No more than 3 moving violations in the past 3 years, and no DUI or reckless driving on your record.  (MVD check will be run.)
o    You and your attorney will both need to sign the documents to acknowledge payment will be made from the insurance proceeds received on your claims.  (If you do not have an attorney, Accident Rentals can refer you to a competent and respected attorney who will promptly return documents to get your rental authorized.)

This document is intended to provide general guidelines to assist a lay person in dealing with property damage issues with the insurance companies. It is not intended to provide legal advice. You should seek advice from a qualified independent adjuster or attorney as to the particulars of your case. If you need a referral to a professional, please call us today.

Accident Rentals Company, LLC, 5713 W. Maryland Ave, Glendale, AZ 85303