Diminished Value Claims in Arkansas

How Diminished Value Works in Arkansas

Arkansas is unusual among diminished value states: both UMPD and UIM coverage extend to diminished value — a protection most states lack. Under Ark. Code § 23-89-404, UMPD must be offered when UM bodily injury coverage is purchased, with a $200 deductible and $25,000 minimum per accident. This includes hit-and-run scenarios (provided there is physical contact). In addition to third-party liability claims, you may have DV coverage through your own policy.

Arkansas follows a modified comparative fault rule with a 50% bar: you recover nothing if you’re 50% or more at fault. Below 50%, recovery is reduced by your fault percentage. The 3-year statute of limitations is longer than the standard 2-year window in most states. The $5,000 small claims limit covers many typical DV claims — note that attorneys are NOT permitted in Arkansas small claims court.

Arkansas’ Key Court Rulings

MFA Insurance Co. v. Citizens National Bank of Hope, 545 S.W.2d 70 (Ark. 1977) is the controlling Arkansas Supreme Court decision establishing the “difference in fair market value immediately before and immediately after” the injury as the measure of property damage. This framework directly supports DV claims in Arkansas.

Arkansas also has a unique “double damages” provision under Ark. Code § 27-53-402: if property damage is $1,000 or less and the liable party fails to pay within 60 days of written notice without a meritorious defense, they may be liable for double the amount plus attorney fees. This applies to a narrow subset of smaller DV claims.

How to File a Diminished Value Claim in Arkansas

Step 1: Get a professional appraisal ($200–$400). Regional comparable sales data matters — northwest Arkansas, central Arkansas, and the Delta have different market conditions.

Step 2: Check your own UMPD/UIM coverage. Arkansas is one of the few states where your own uninsured/underinsured motorist property damage coverage may pay for DV if the at-fault driver is uninsured or underinsured. Check your policy declarations page.

Step 3: Send a written demand to the at-fault driver’s insurer (or your own if using UMPD). Include your appraisal, repair documentation, and claimed amount. Cite MFA Insurance v. Citizens National Bank (1977).

Step 4: Small claims court ($5,000 limit) is available for most DV claims. Arkansas District Courts handle small claims with informal procedures. Attorneys are not permitted — you’ll represent yourself.

Claim Types Available in Arkansas

• Third-party claim — file against the at-fault driver's insurance.
• Uninsured motorist property damage (UM/UIMPD) — your policy covers DV if the at-fault driver is uninsured or underinsured.

Key Court Ruling for Arkansas

MFA Insurance Co. v. Citizens National Bank of Hope, 545 S.W.2d 70 (Ark. 1977) — Arkansas Supreme Court established the 'difference in fair market value immediately before and immediately after' standard for property damage. Arkansas is one of the few states where UMPD and UIM coverage extend to diminished value.

Statute of Limitations in Arkansas

You have 3 years from the date of the accident to file a diminished value claim in Arkansas.

Small Claims Court in Arkansas

Arkansas's small claims limit is $5000. Most diminished value claims fall under this threshold. You can file without an attorney.

What Makes Arkansas Different

• UMPD and UIM coverage extend to diminished value — one of the few states with this protection
• Modified comparative fault with 50% bar — if you are 50% or more at fault, you recover $0
• Attorneys are not permitted in Arkansas small claims court

How to File a Diminished Value Claim in Arkansas

1. Get a professional diminished value appraisal. The 17c formula (our calculator) gives you a starting point, but insurance companies will demand a certified appraisal for any claim above the 17c result.
2. Gather documentation: pre-accident photos, repair invoices, the accident report, and before/after market value comparisons.
3. Send a written demand letter to the at-fault driver's insurance company including your appraisal, documentation, and the amount you're claiming.
4. Negotiate. Insurance companies typically start low. Be prepared to go back and forth with counteroffers based on your independent appraisal.
5. If they won't settle fairly, file in small claims court.

Frequently Asked Questions

Does Arkansas allow diminished value claims?

Yes. Arkansas allows diminished value claims through: the at-fault driver's insurance (third-party) , uninsured motorist property damage coverage .

How long do I have to file in Arkansas?

3 years from the accident date.

Can I file without an attorney in Arkansas?

Yes — most DV claims fall under Arkansas's $5000 small claims limit.

Does the 17c formula determine what I'll actually get?

No. The 17c formula is a starting point. Insurers use it as a low baseline. Independent appraisals commonly find 2–4× the 17c result. Never accept the 17c figure as the final offer without pushing back.

What if I was partially at fault for the accident?

Your recovery is reduced by your percentage of fault (comparative negligence). For example, if you were 20% at fault, your recovery is reduced by 20%.

Statute: Ark. Code Ann. § 16-56-105 — Source