State guide · Southwest
Arizona subrogation law guide
The insured's negligence reduces its damages in proportion to its share of fault but never bars recovery. Fault is compared among parties and properly noticed nonparties, and each defendant pays only its own share under A.R.S. 12-2506.
Arizona at a glanceAZ
- Property damage
- 2 years
- Bodily injury
- 2 years
- Fault rule
- Pure comparative
- Gov. notice
- 180 days
Overview
Arizona combines pure comparative fault with pure several liability, which shapes nearly every subrogation file in the state. The insured's own negligence never bars recovery, but each defendant pays only its percentage of fault, and defendants can shift blame to nonparties by serving notice under Ariz. R. Civ. P. 26(b)(5). A carrier that fails to sue every responsible party absorbs the unallocated share. Both property damage and bodily injury claims run two years under A.R.S. 12-542, and claims against any public entity require a notice of claim within 180 days that states a specific settlement amount, a trap the Arizona Supreme Court enforces strictly. Arizona has no product statute of repose after Hazine, which keeps older water heaters, supply lines and HVAC components in play for product recovery. The state also bars medical payments subrogation and reimbursement as an assignment of a personal injury claim, so collision, property and uninsured motorist recoveries carry the value. Written contract and indemnity claims run six years, a useful fallback in landlord, tenant and contractor losses.
Quick reference with citations
- Property damage SOL
- 2 years
- A.R.S. 12-542(3) (trespass for injury done to the estate or the property of another)
- Bodily injury SOL
- 2 years
- A.R.S. 12-542(1)
- Product liability
- 2 years from injury (A.R.S. 12-542 and 12-551); the 12-year product statute of repose in A.R.S. 12-551 was held unconstitutional in Hazine v. Montgomery Elevator Co., 176 Ariz. 340 (1993); 4 years for UCC warranty claims (A.R.S. 47-2725)
- Written contract
- 6 years
- Contract and indemnity recoveries
- Comparative fault rule
- Pure comparative
- A.R.S. 12-2505
- Government notice of claim
- 180 days
- A notice of claim must be served on the person authorized to accept service for the public entity or public employee within 180 days after the cause of action accrues (A.R.S. 12-821.01(A)). The notice must contain facts supporting liability and a specific amount for which the claim can be settled, a requirement Deer Valley Unified School District No. 97 v. Houser, 214 Ariz. 293 (2007) enforces strictly. The claim is deemed denied after 60 days, and suit must be filed within one year after accrual (A.R.S. 12-821). The rules cover the State, counties, cities, school districts and other public entities.
Fault rule in practice
How Arizona's rule changes a $50,000 recovery.
The insured's negligence reduces its damages in proportion to its share of fault but never bars recovery. Fault is compared among parties and properly noticed nonparties, and each defendant pays only its own share under A.R.S. 12-2506.
Authority: A.R.S. 12-2505
| Insured's share of fault | Recoverable in AZ | Under pure comparative |
|---|---|---|
| 0% | $50,000 | $50,000 |
| 20% | $40,000 | $40,000 |
| 50% | $25,000 | $25,000 |
| 60% | $20,000 | $20,000 |
Doctrines that move the number
Arizona doctrine checklist.
Made-whole doctrine
Arizona courts have not adopted the made-whole doctrine in the property subrogation setting, so a property or collision carrier's subrogation rights are generally enforced as written. Bodily injury is different: Arizona treats personal injury claims as unassignable before judgment, and Harleysville Mutual Insurance Co. v. Lea, 2 Ariz. App. 538 (1966) and Allstate Insurance Co. v. Druke, 118 Ariz. 301 (1978) bar medical payments subrogation and reimbursement out of the insured's injury recovery. Uninsured motorist carriers have a statutory right to subrogate against the uninsured driver (A.R.S. 20-259.01).
Economic loss doctrine
For products, Salt River Project Agricultural Improvement & Power District v. Westinghouse Electric Corp., 143 Ariz. 368 (1984) weighs the nature of the defect, how the loss occurred and the type of loss, so a sudden, dangerous failure can stay in tort. In construction cases, Flagstaff Affordable Housing L.P. v. Design Alliance, Inc., 223 Ariz. 320 (2010) limits contracting parties to contract remedies for purely economic loss, while damage to other property remains a tort claim.
Joint and several liability
Arizona abolished joint and several liability for most cases: each defendant pays only its percentage of fault (A.R.S. 12-2506), with exceptions for parties acting in concert and for agents and servants. Defendants can shift fault to a nonparty by serving notice under Ariz. R. Civ. P. 26(b)(5), and the subrogating carrier absorbs any share allocated to a party it did not or could not sue.
Anti-subrogation and waiver
A carrier cannot subrogate against its own insured (Transportation Indemnity Co. v. Carolina Casualty Insurance Co., 652 P.2d 134 (Ariz. 1982)). A hired transporter is not an insured under the owner's collision coverage, so subrogation against a vehicle shipping company is allowed (Amica Mutual Insurance Co. v. Auto Driveaway Co., 831 P.2d 882 (Ariz. App. 1992)).
Practice notes
Working Arizona subrogation files.
- 1
The public entity notice is the most common way Arizona recoveries die. Serve the person authorized to accept service (for a city, usually the city clerk) within 180 days of accrual, include the facts supporting liability, and state one specific dollar figure the entity can pay to settle. A notice that says "damages exceed $40,000" fails. Suit is still due within one year of accrual, even while the entity sits on the claim.
- 2
Pure comparative fault and several liability work together in the recovery math. Suppose a carrier pays $60,000 after an intersection collision, the insured is 30% at fault, the other driver 50% and a city signal malfunction 20%. Suing only the driver yields $30,000. Adding the city through a timely notice of claim yields $42,000. Missing the city deadline costs $12,000 that no remaining defendant has to pay.
- 3
Do not open medical payments subrogation files on Arizona losses; Lea and Druke treat them as assignments of a personal injury claim. Focus resources on collision, property, rental and uninsured motorist recoveries, where subrogation rights are intact. When an insured also has an injury claim, coordinate so the property damage demand is resolved separately and early, and confirm any release does not sweep in the carrier's property claim.
- 4
For water and fire losses, use the six-year written contract period (A.R.S. 12-548) when a lease, construction contract or service agreement allocates risk to the responsible party, and the two-year tort period for negligence claims. Because Hazine eliminated the product repose period, a supply line failure involving a fitting installed fifteen years ago can still support a product claim if suit is filed within two years of the loss.
- 5
Ishqkala opens two clocks when an Arizona file references a city, county, school district or utility district: the 180-day notice deadline under A.R.S. 12-821.01 and the one-year suit deadline under 12-821. The Demand Package Builder drafts the notice with a single settlement figure built from paid loss, deductible and documented uninsured items, so counsel reviews a compliant notice rather than starting from scratch.
Key cases
Hazine v. Montgomery Elevator Co.
176 Ariz. 340, 861 P.2d 625 (1993)
Held the 12-year product liability statute of repose unconstitutional under the Arizona Constitution's anti-abrogation clause. Product subrogation against an older appliance or component is limited only by the 2-year statute of limitations.
Deer Valley Unified School District No. 97 v. Houser
214 Ariz. 293, 152 P.3d 490 (2007)
A notice of claim against a public entity must state a specific amount for which the claim will be settled. A notice that only describes damages or gives a range is defective and the claim is barred.
Harleysville Mutual Insurance Co. v. Lea
2 Ariz. App. 538, 410 P.2d 495 (1966)
Treated an insurer's claim to an insured's personal injury recovery for medical payments as an invalid assignment of a personal injury claim. Medical payments dollars in Arizona are generally not recoverable through subrogation.
Inter-company arbitration
Arbitration Forums panels apply Arizona law, so pure comparative fault produces proportionate awards and a respondent may argue the negligence of an unnamed party. Company-paid damages up to $100,000 are compulsory for signatories in the Automobile and Property forums. The Medical Payment forum is compulsory only where medical payments subrogation is permitted by statute or judicial decision, which Arizona law generally does not allow. Public entities that are not AF signatories must be pursued through the notice-of-claim process and the courts.
How Ishqkala applies this guide
AZ rules, built into every score.
- Opportunities with a Arizona loss state are calendared against the 2 years property damage period or the 2 years bodily injury period, whichever controls the claim type.
- The insured's estimated fault share is applied under pure comparative before recoverable dollars are scored.
- Files involving a public entity get a 180-day notice deadline that outranks the general SOL in the priority queue.
- Alerts fire at 180, 90, 45 and 15 days before the controlling deadline.
Other pure comparative jurisdictions
FAQ
Arizona subrogation FAQ
2 years (A.R.S. 12-542(3) (trespass for injury done to the estate or the property of another)). A subrogating carrier generally takes the insured's claim subject to the same limitation period, usually measured from the date of loss.
Pure comparative (A.R.S. 12-2505). The insured's negligence reduces its damages in proportion to its share of fault but never bars recovery. Fault is compared among parties and properly noticed nonparties, and each defendant pays only its own share under A.R.S. 12-2506.
A notice of claim must be served on the person authorized to accept service for the public entity or public employee within 180 days after the cause of action accrues (A.R.S. 12-821.01(A)). The notice must contain facts supporting liability and a specific amount for which the claim can be settled, a requirement Deer Valley Unified School District No. 97 v. Houser, 214 Ariz. 293 (2007) enforces strictly. The claim is deemed denied after 60 days, and suit must be filed within one year after accrual (A.R.S. 12-821). The rules cover the State, counties, cities, school districts and other public entities.
Arizona courts have not adopted the made-whole doctrine in the property subrogation setting, so a property or collision carrier's subrogation rights are generally enforced as written. Bodily injury is different: Arizona treats personal injury claims as unassignable before judgment, and Harleysville Mutual Insurance Co. v. Lea, 2 Ariz. App. 538 (1966) and Allstate Insurance Co. v. Druke, 118 Ariz. 301 (1978) bar medical payments subrogation and reimbursement out of the insured's injury recovery. Uninsured motorist carriers have a statutory right to subrogate against the uninsured driver (A.R.S. 20-259.01).
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