For the past few months we’ve been posting updates on a bipartisan bill to increase the minimum insurance requirements for the state. The bill passed the legislature and went to the governor’s desk to either be signed into law or vetoed. And he chose… VETO!
In his message to the legislature, Governor Ducey stated he was concerned that auto insurance rates might rise and cause more people to drive illegally without insurance. During the debate on the bill, there was an estimate that insurance could cost an extra $90 per year for a new increased minimum policy.
What does this mean? Arizona required minimum limits will stay the same level they’ve been since 1972: 15-30-10. That means there is a fifteen thousand dollar max payment per person for injuries (excluding the person at fault). There is a thirty thousand dollar max payment for all the injury claims from the accident. And there are ten thousand dollars total available for all property damage claims. Click here for a more thorough breakdown.
In our experience, the minimum limits are dangerously low and do not cover many of the injuries and vehicle damages we see in the cases that come through our door. For example, a minimum policy is not likely to cover an Arizona diminished value claim. An Arizona diminished value claim is when you try to recover the resale value your vehicle loses after an accident. If your vehicle was worth $25,000 and sustained $10,000 in damage, hypothetically it may have lost $5,000 in resale value. Normally, you could attempt to recover that lost $5,000 by making a diminished value claim. However, the only available insurance money on a minimum policy was used up by your repairs cost.
What Can You Do Now?
Even though the government has not raised the minimum limits, we can offer some options for you to proactively take action to better protect yourself on the roads. We recommend buying an insurance policy with at least limits of 100/300/100, uninsured motorist coverage, underinsured motorist coverage, $5,000 of medical payments coverage as well as comprehensive, collision and rental coverage.
Underinsured motorist coverage
Underinsured motorist coverage solves the issue of low state limits most directly. Underinsured motorist covers your bodily injuries only. So, if you have more than the at-fault party’s limits in medical bills and pain and suffering damages, the underinsured coverage will make up the difference (up to your policy’s limits). This kind of coverage is crucial for accidents with severe injuries or with many people injured in one accident.
Uninsured Motorist Coverage
Uninsured motorist coverage also covers the cost of injuries, and is needed in more cases than you might think. The most obvious case is if the driver of the other vehicle never bought insurance or let their policy lapse. Since insurance is a contract, their insurance company does not have to pay for your damages if the insured individual has not been meeting their contractual obligations.
Another scenario is if you are hit by a hit and run driver who is never caught. Whether they gave you fake information, or just immediately left the scene, you can’t be paid by a person you can’t identify. If a person is drinking and driving, worried that they have warrants, or just scared, they could take off and leave you without a way to pay for your vehicle’s damage, diminished value, or personal injuries.
Additionally, the other person’s insurance may decide, “nope, we’re not obligated to pay for this.” Again, insurance is a contract and follows whatever rules the person agreed to when they signed their policy. A huge area of conflict recently has been how driving for Lyft or Uber affects a person’s personal coverage. If you’re hit by an Uber driver and it’s unclear if they were on the clock, the Uber insurance and personal insurance might both refuse coverage, leaving you forced to pursue the individual: a messy process and relies on the person actually having enough cash or assets to cover your damages.
Medical Payments Coverage
Medical payments coverage will pay for your medical treatment after an accident. This is especially helpful when your health insurance has the right to subrogation, meaning they can demand to be repaid for an accident related treatment. We’ve seen health insurance companies make this decision over a year after the original accident, Medical payments coverage lets you avoid the risk of that paperwork nightmare. Medical payments coverage also gives you an added buffer on top of the at-fault party’s insurance and your underinsured insurance for severe accidents.
Comprehensive, collision And Rental coverage
Comprehensive and collision coverage are for your property damage. These are useful as a first line of defense for your car’s damage. Even if the other person is at fault, you can use this coverage immediately for repairing your car, securing a rental vehicle, and paying towing and storage fees. Be careful, because the exact terms of this coverage will vary by policy. For example, you may only be allowed a certain type of rental vehicle for a limited amount of days.
In general, collision insurance is when you hit something. For example, you hit another car, you hit a pothole, you hit a tree, you roll your car and it hits the ground, etc.
Comprehensive insurance generally means something besides a car hits you. For example, a tree branch falls and hits your car, an elk jumps into the road and hits you, or someone steals or damages your car.
Rental Coverage is to provide you with a rental car while your vehicle is being repaired or totaled out. It is important to review your rental coverage and see what exactly is provided. Many policies will only allocate a certain amount of money for a certain period of time. If you have a large family you will want to verify they will cover a larger vehicle like an SUV or mini-van.
Speak to an Experienced Attorney About Your Car Accident
If you are dealing with an accident involving minimum limits, call us for a free consultation with an experienced accident attorney to analyze your case. We are happy to look it over with no obligation.
If you have been in an accident in Scottsdale, Tempe, Mesa, Gilbert or elsewhere in the East Valley we can meet you in our Tempe or Gilbert office.