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Arizona Auto Insurance: Types and Needs

Guide to Auto Insurance in Arizona

As an Arizona driver, you are legally required to have auto insurance to operate a vehicle. With many options available, choosing the right coverage for your needs can be challenging. This page is designed to help you navigate the different types of auto insurance in Arizona, including the minimum required coverage, so you can make well-informed decisions and hit the road with peace of mind.

If you have questions after reading this, please give us a call. We are also happy to review your coverage to make sure that you have adequate insurance coverage.

Liability Insurance

Liability insurance is the foundational coverage required in Arizona. This type of insurance safeguards your finances if you are found responsible for an accident, covering the expenses of damages and injuries you cause to others or their property. The minimum liability insurance requirements in Arizona are as follows:

– Bodily Injury Liability: $25,000 per person and $50,000 per accident
– Property Damage Liability: $15,000 per accident

Keep in mind that these are only the minimum requirements; it’s prudent to consider higher limits for greater protection in the event of a severe accident.

Collision Insurance

Collision insurance covers the expenses of repairing or replacing your vehicle if it’s damaged in an accident, regardless of fault. While not mandated by the state, collision coverage is often necessary if your vehicle is financed or leased, as lenders generally require it to safeguard their investment.

Comprehensive Insurance

Comprehensive insurance offers coverage for damages to your car resulting from non-collision incidents, such as theft, vandalism, natural disasters, or encounters with animals. Like collision insurance, comprehensive coverage is not required by Arizona law but may be stipulated by your lender or leasing company.

Uninsured/Underinsured Motorist Coverage

Uninsured motorist (UM) coverage provides protection if you’re involved in an accident with an at-fault driver who lacks insurance. Underinsured motorist (UIM) coverage steps in when the at-fault driver’s insurance is inadequate to cover your damages. Although not legally required in Arizona, UM/UIM coverage can offer vital financial protection in the event of an accident with an uninsured or underinsured driver.

Uninsured and underinsured motorist coverage is the most often overlooked coverage that clients forget to buy. This coverage protects you if the person who hit you does not have enough insurance in the event that you’re physically injured. For example, if you are in a car accident and have a broken leg, medical bills can easily be in excess of $100,000. If the other driver only has a $25,000 liability policy, which is very common, or no insurance coverage at all, which is also very common, then you would get no compensation at all. You would be stuck paying your out-of-pocket medical bills, bet nothing for your lost wages, get nothing for your pain and suffering, etc…

Underinsured (UIM) and Uninsured (UM) motorist coverage fills the gap and provides compensation for your personal injury, lost wages, and medical bills if you are hurt in an accident that someone else is responsible for. Also, this type of coverage also will protect you if you are walking on the sidewalk and a car hits you or a piece of debris from a motor vehicle strikes and injures you.

Clients are often very concerned that if they make a claim on their own UM or UIM policy, their own insurance rates will be raised. Fortunately, this is almost never going to be the case. Arizona has a law that states that if you are not at fault, the insurance company is not allowed to raise your rates; see Arizona revised statute section 20-563: “No insurer shall increase the motor vehicle insurance premium of an insured as a result of an accident not caused or significantly contributed to by the actions of the insured. Any insurer which increases the premium as a result of accident involvement shall notify the insured of the reason for such increase.”

Uninsured and underinsured motorist coverage is generally inexpensive and is the very best thing you can do to protect yourself. Most drivers do not have adequate insurance. If another driver seriously injures you in a car crash, usually you are not going to be able to get fully compensated and have your bills fully paid unless you have paid for uninsured and underinsured motorist coverage.

Medical Payments Coverage

Medical payments coverage, also known as MedPay, assists with medical expenses for you and your passengers following an accident, irrespective of fault. This optional coverage in Arizona can be particularly helpful in covering health care costs if you have a high-deductible health insurance plan or no health insurance at all. Typically, these policies will cover $5,000 or $10,000 of your out-of-pocket medical bills.

Personal Injury Protection (PIP)

Personal Injury Protection (PIP) is an optional coverage in Arizona that compensates for medical expenses, lost wages, and other non-medical costs for you and your passengers, regardless of fault in an accident. PIP can be a valuable supplement to your insurance policy, offering a safety net in the event of injury or lost income due to an accident.

In conclusion, while liability insurance is the sole legally required coverage in Arizona, you need to explore additional insurance types to safeguard your finances and vehicle. By familiarizing yourself with the range of coverage options, you can select the ideal auto insurance policy tailored to your needs.

If in doubt, feel free to give us a call at the Law Offices of John Phebus. We are not insurance agents or brokers, but we are happy to review, at no charge, your coverages and let you know if you are missing important types of coverage.