Arkansas
Diminished Value Overview
In Arkansas, a vehicle involved in a not at fault accident may lose market value even after repairs are completed. When another driver is responsible for the accident, Arkansas law allows you to pursue compensation for that loss in value from the at fault driver’s insurance company as part of your property damage claim.
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01
Statute of Limitations
Arkansas allows three years from the date of the accident to pursue a diminished value claim.
02
Third-Party Claims
You may pursue a diminished value claim against the at fault driver’s liability insurance when another driver caused the accident.
03
First-Party and Uninsured Motorist
Most first party policies exclude diminished value, but Arkansas does allow recovery for diminished value under uninsured or underinsured motorist property damage coverage if you carry that coverage.
04
Small Claims Court Limit
Arkansas small claims court allows diminished value claims up to $5,000.
Arkansas Diminished Value Law
Arkansas law recognizes that a vehicle may suffer a loss in market value after a collision even if repairs are performed. When another driver is at fault, that loss may be recovered as part of a third party property damage claim.
MFA Insurance Co. v. Citizens National Bank of Hope, 545 S.W.2d 70 (Ark. 1977)
The Arkansas Supreme Court held that when repairs do not substantially restore a vehicle to its former condition and value, the proper measure of damages is the difference in the vehicle’s value before the accident and its value after the accident and repairs.
This decision confirms that repair costs alone may not fully compensate a vehicle owner when a repaired vehicle remains worth less in the open market. Arkansas courts recognize diminished value as a legitimate element of property damage where that loss can be shown.