Total loss laws in Arizona

When is a car totaled in Arizona?

Short answer: Arizona sets no percentage threshold for insurer-paid claims (A.R.S. § 28-2091(A), (T)(3)), so the total-loss decision is generally the insurer's under your policy.

No percentage threshold. A 'salvage vehicle' is one damaged to the extent that the owner, leasing company, financial institution or insurer considers it uneconomical to repair. When an insurer acquires a vehicle through a total-loss settlement, it must apply for a salvage, stolen-vehicle or nonrepairable title within 30 days after the owner properly assigns the title to it.

Source: A.R.S. § 28-2091(A), (T)(3)

Many online tables mix up title-branding rules with the insurer's own decision. Compare the total loss threshold in every state.

Does insurance pay sales tax on a total loss in Arizona?

Short answer: Yes. Arizona requires a cash settlement for a total loss on your own policy to include sales tax and transfer fees such as title and registration (Ariz. Admin. Code R20-6-801(H)(1)(a)-(b)).

A first-party cash settlement on an actual-cash-value or like-kind-and-quality total loss must be based on the actual cost of a comparable automobile, including all applicable taxes, license fees and other fees incident to transfer of ownership, less the deductible. A replacement-vehicle offer must also cover these. No replacement purchase is required.

Source: Ariz. Admin. Code R20-6-801(H)(1)(a)-(b)

Tax on a replacement car in Arizona

5.6% state transaction privilege tax (TPT); county excise and city privilege taxes are added. Sales to some nonresidents are partly or fully exempt.

Source: https://azdor.gov/business/transaction-privilege-tax/motor-vehicle-sales

See the sales tax and fee rule in every state.

How must the insurer value your car in Arizona?

First-party total loss cash settlement: the cost of a comparable automobile in the local market area when one is available, or, if none is available, one of two or more quotations from two or more qualified dealers in the local market area. A settlement on any other basis must be supported by documentation of the vehicle's condition. Every deduction, including salvage, must be measurable, discernible, itemized, specified in dollars and appropriate in amount, and the basis must be fully explained to the claimant. Betterment or depreciation reductions must be itemized and documented. Insurer repair estimates must be reasonable, and the claimant gets a copy. Claimants cannot be required to travel unreasonably.

Source: Ariz. Admin. Code R20-6-801(H)(1)(b)-(c), (H)(3), (H)(5)-(6)

To check the numbers in your own report, read the CCC valuation report, line by line and how projected sold and typical negotiation deductions work.

How long does the insurer have to pay a total loss in Arizona?

Short answer: Under Arizona rules, payment is due within 30 days after an acceptable proof of loss. A decision is due within 15 working days after proof of loss. If payment is late: interest at the legal rate on a first-party claim not paid within 30 days.

Acknowledge a claim within 10 working days and reply to other pertinent communications within 10 working days. Complete the investigation within 30 days unless that is not reasonably possible. Advise a first-party claimant in writing of acceptance or denial within 15 working days after proofs of loss; if more time is needed, give notice within 15 working days, then a letter 45 days later and every 45 days after. A first-party claim not paid within 30 days after the insurer receives an acceptable proof of loss with all information needed to decide it carries interest at the legal rate from the date the claim was received. Before a statute of limitations or policy time limit expires, an unrepresented claimant must get written notice at least 30 days ahead (first party) or 60 days ahead (third party).

Source: Ariz. Admin. Code R20-6-801(E)(1),(3), (F), (G)(1)(a)-(b), (G)(4); A.R.S. § 20-462(A)

Compare claim deadlines in every state.

Can you negotiate a total loss offer in Arizona?

Short answer: Yes. You can reject the offer in writing, ask for the full valuation report and the reason for each deduction, and send your own evidence. The Arizona Department of Insurance and Financial Institutions, Consumer Services takes complaints about claim handling.

The owner can reject the offer in writing, demand the itemized basis and the local comparables or dealer quotes required by R20-6-801(H)(1), invoke the policy's appraisal clause, file a complaint with DIFI (Arizona Department of Insurance and Financial Institutions), or sue: justice court or small claims for smaller amounts, or superior court. Under A.R.S. § 20-462, an undisputed first-party payment made late carries interest.

1. Ask the adjuster in writing for the complete valuation report and the list of comparable vehicles.
2. Check it line by line: negotiation deductions, condition ratings, comparables, tax and fees. How to read the report.
3. Send a written rebuttal with your evidence and a specific number. How to dispute a total loss valuation.
4. If you still disagree on a claim under your own policy, consider the appraisal clause.
5. If the insurer does not follow the rules above, file a complaint with the state.

How long do you have to sue over a totaled car in Arizona?

Short answer: Generally 2 years to sue for damage to your car (A.R.S. § 12-542(3)). Your policy may set a shorter limit for suing your own insurer.

Property damage claims in Arizona generally must be filed within 2 years. Your policy may set a shorter deadline for suing your own insurer; check its "legal action against us" clause.

Source: A.R.S. § 12-542(3) (trespass for injury done to the property of another: 2 years)

How to file an insurance complaint in Arizona

Short answer: File a free complaint with the Arizona Department of Insurance and Financial Institutions, Consumer Services online. It asks the insurer for a written response, but it cannot set the amount you are owed.