Diminished value claims with Farmers Insurance

Start with which claim you have

The rulings below fall into two groups, and only one will matter to you. Five are about Farmers policyholders claiming on their own collision coverage. One is about the owner of a car hit by a driver Farmers insured. If you are not sure which describes you, read first-party vs third-party diminished value first. Autoloss is an independent appraisal company. It is not affiliated with or endorsed by Farmers, and uses the name only to identify the insurer.

Oregon and Washington: rulings for policyholders

In Gonzales v. Farmers Insurance Co. of Oregon (Or. 2008), the Oregon Supreme Court held that “repair” in the policy meant restoring the vehicle to its pre-loss physical condition, and that if the insurer did not do so it had to compensate the policyholder for the diminished value. The court did not decide whether a claim based only on stigma is covered, and it noted that nothing prevents insurers from defining “repair” in a policy to exclude diminished value. See the Oregon page.

In Moeller v. Farmers Insurance Co. of Washington (Wash. 2011), the Washington Supreme Court held, five to four, that the policy’s limiting language was ambiguous and so covered diminished value after repair, and it upheld certification of a class of policyholders. The majority distinguished damage that cannot be fully restored from stigma attached to a fully restored car. See the Washington page.

Colorado, New Mexico and Arkansas

• Colorado. Hyden v. Farmers Insurance Exchange (Colo. App. 2000) found “of like kind and quality” ambiguous, read it in the policyholder’s favor, and reversed summary judgment for Farmers on the contract claim. It affirmed judgment for Farmers on the bad-faith claim.
• New Mexico. Davis v. Farmers Insurance Co. of Arizona (N.M. Ct. App. 2006) held that the policy unambiguously did not cover diminished market value after an adequate repair, and that Farmers did not breach its duty of good faith.
• Arkansas. Farmers Insurance Co. v. Snowden (Ark. 2006) affirmed certification of a class of policyholders. It was a procedural ruling, and the court did not decide whether the policy covered diminished value.

All five decisions interpret the policy wording that was before the court. Policy forms differ by state and change over time, so none of them tells you what your current policy says.

Arizona: a claim against a driver Farmers insured

Farmers Insurance Co. of Arizona v. R.B.L. Investment Co. (Ariz. Ct. App. 1983) arose when a driver insured by Farmers damaged a dealership’s new car. The Arizona Court of Appeals held that the owner of a negligently damaged vehicle may recover the cost of repair plus proven residual loss in market value. That is a statement of Arizona law about at-fault drivers, not a ruling about Farmers’ practices. The Arizona page covers how it applies now.

Sending a claim to Farmers

When we checked in October 2026, the Farmers claims page offered online filing by claim type and document upload for existing claims. A diminished value demand normally goes to the adjuster on the existing property damage claim. Use the contact details on your claim paperwork, as our insurer contact page explains. Attach the items listed in the demand letter guide.

What an appraisal adds

Several of these courts drew a line between physical damage that repair could not fully restore and loss tied only to the accident history. A diminished value appraisal from Autoloss reviews the repair order and photos, identifies what was damaged and how it was repaired, and supports the figure with comparable vehicles. It is evidence for your claim, not a promise of payment.

If you and Farmers disagree

Ask for the reasons in writing. After your appraisal describes the next steps, and how to file an auto insurance complaint covers your state regulator. The steps that apply to every company are in the general filing guide. For another insurer with rulings in many states, see State Farm.