FAQs about Arizona’s Newly Increased Insurance Policy Limits

Anyone who drives knows that insurance coverage is just part of the privilege you pay for to enjoy the freedom of car ownership. By the time you get through paying for your car payment, maintenance, gas, and insurance, it can be a tough bill to swallow each month. The Grand Canyon State isn’t making it any easier for residents to afford driving, either.

Arizona just passed a law increasing minimum coverage limits for standard auto policies. This means in addition to passenger vehicles, golf carts, motorcycles, and mopeds are all subject to the new insurance limit requirements to cover them for liability in the event of an auto accident. So what does this mean for drivers? Below we answer some basic questions you may have about this new rule.

What are the new minimum requirements for insurance?

As of July 1, 2020 your new statutory minimum limits were increased to:

• $25,000 for one person sustaining bodily injury or death in an accident
• $50,000 for two or more persons sustaining bodily injury or death in an accident
• $15,000 for damage to another person’s property

Why was there a coverage increase?

Limits have been raised to account for the increased cost associated with paying out claims. Even a minor accident can cost thousands by the time you finish with medical bills and repairing vehicle damage. State officials recognized that the antiquated coverage was no longer sufficient to protect drivers and increased the minimum requirements to accomplish that goal.

Will the mandatory limit increase cause my premiums go up?

If you held minimum coverage before the increase took effect, your policy will be automatically adjusted to reflect the new mandatory minimum, as will your premiums. The coverage has been increased by approximately 40% so drivers may see monthly premiums increase by the same amount.

Can I still waive UM/UIM coverage?

Uninsured motorist coverage (UM) and underinsured motorist coverage (UIM) are optional coverages that you can add on to your auto insurance policy. While you can choose to waive this coverage and save a few bucks a month, it’s really not in your best interest to do so. If you are involved in an accident with someone who doesn’t have insurance or who doesn’t have enough coverage to pay for your damages, you’re going to be on the hook to pay for any uncovered expenses out of your own pocket. A major accident that totals your vehicle can end up costing you hundreds of thousands of dollars and potentially even bankrupting you if you decline UM or UIM coverage.

So, we urge everyone to buy as much Underinsured and Uninsured Motorist coverage as they can afford. You need that protection as much as you need the other coverages on your policy.

Will I be affected if I already have more than the minimum limit?

If you already have increased coverage, you shouldn’t see any change. The only people who should be affected are those who buy the bare minimum coverage. If you see an increase in your bill, contact your insurance agent to ask why your premiums increased when you already purchased more extensive coverage.

Can I choose to drop my insurance?

No: in Arizona all drivers are required to carry the minimum mandatory coverage limits or risk having their driver’s license suspended, which can make driving substantially more expensive. By failing to maintain basic coverage, you’re taking great risk when you get stopped for even a minor traffic violation or accident. If you cannot produce proof of insurance when law enforcement asks for it, you may find yourself having to buy expensive SR22 insurance in addition to paying fees to reinstate your license and registration.

It’s important to meet the requirements for carrying auto insurance coverage under the law. Failing to do so can put you at serious risk should you become involved in an accident. If you are hit by an uninsured driver, and you, yourself are uninsured, you could be left with no recourse for having your medical bills or vehicle damages covered. The financial hardship you face is too great to risk.

If you or a loved one has been injured by a negligent driver, let the experienced Phoenix car accident attorneys at Plattner Verderame, P.C. step in to protect your right to pursue the maximum compensation for the damages you’ve suffered. To schedule your free consultation to discuss your personal injury case in Phoenix or Tempe, call us at 602.483.6602 or we invite you to complete our contact form.