In most states, auto insurance is required by law, and for good reason. It's expensive to repair or replace someone else's property, or to pay for someone else's injuries in an at-fault accident. Each state's department of insurance determines the minimum required levels of coverage (more on this later).
Arizona Financial Responsibility Law
Like 38 other at-fault states, Arizona holds the driver who caused the accident, (referred to as at-fault), financially responsible for any property damage, bodily injury/medical bills, lost wages, and possibly additional associated costs suffered by the not-at-fault person(s).
Policy Limits - Split Limits and Combined Limits
There are two ways that policy limits are offered:
Split Limits are the most popular and are displayed as Per-person Limit/Per-Accident Limit such as $250,000/$500,000 which means up to$250,000 per person, up to a total payout allowed of $500,000 for the accident/incident. Property damage liability is often added at the end of these numbers to make it easy to see all three limits at once such as $250,000/$500,000/$100,000 - this means that in addition to the bodily injury liability the $100,000 indicates that your policy has a limit of up to $100,000 for damage to someone else's property.
Combined Limits aren't as common but are still widely used and is displayed as one number such as $500,000 CSL (combined single limit). This means that both bodily injury and property damage liability payments are distributed out of one bucket of $500,000.
Pieces of an Auto Policy
Coverage A - Bodily Injury and Property Damage Liability
If you are found at-fault and legally responsible, this coverage pays the third-party for costs related to the treatment of bodily injury up to the amount you've chosen in your policy limits. Exclusions apply such as intentional harm, racing, and others.
If you are found at-fault and legally responsible, this coverage pays the third-part for costs related to the repair or replacement of property such as vehicles, walls, fences, poles, etc. up to the amount you've chosen in your policy limits. Exclusions apply.
Coverage B - Medical Payments
Medical payments is an elective coverage, meaning that it is not required by the state of Arizona to meet the financial liability requirements. This coverage is for reasonable expenses for medical and funeral services incurred within three years of the date of injury.
This coverage differs for two reasons: this payment is for you the insured (first-party) and anyone that was in your vehicle at the time of an accident or injury; payout under Medical Payments coverage does not require you to be legally responsible for the accident.
Coverage C - Uninsured Motorist Coverage and Underinsured
Uninsured motorist is an elective coverage and pays for your bodily injury when a third-party is legally at-fault for an accident but does not carry any liability insurance. This coverage applies to you and anyone in your covered vehicle at the time of the accident, or when you and your family occupy another vehicle, including a rideshare like Uber, Lyft, or taxi. This payment also applies in a hit-and-run situation where the third-party cannot be located, and if you are involved in a hit and run as a pedestrian.
It is possible this coverage will pay for bodily injury while the third-party is being located. If the at-fault party is located your insurance company will subrogate (legally recoup financial loss) with their auto insurance, or in some circumstances file lawsuit against their personal assets.
Underinsured Motorist Coverage is also an elective coverage, and is similar to the uninsured coverage but serves to fill a gap if the at-fault party (third-party) doesn't have enough liability coverage for expenses they were legally responsible for.
Coverage D - Collision, and Other Than Collision (Comprehensive)
People often refer to having comprehensive and collision coverage as "full coverage" which is an incorrect statement, no such coverage exists, but the term has been around for decades. If your vehicle is financed or leased, the lender/lessor will require that you have collision and comprehensive coverage. Comprehensive and Collision coverage is an elective coverage, and is not required by the state of Arizona to meet the minimum financial liability requirement.
Collision covers damage to your vehicle when you collide with property, whether it’s another vehicle or an object such as a wall, fence, pole - generally when your vehicle collides with another object, or vehicle upset/turnover. The only situation in which colliding with something does not apply is if you hit an animal that causes damage. Carrying collision coverage subjects you to a deductible which you choose when buying the policy.
Collision coverage is an important coverage, because if something happens to your vehicle that you are at-fault for, if you're in a hit-and-run situation, or if you lose control of your vehicle, you must have this coverage in order for your vehicle to be repaired or replaced. So many people like to drop this coverage once they've paid of their vehicle, but unless your car is worth the same amount or less than your deductible we highly recommend keeping this coverage.
If you are not at-fault for an accident, your vehicle would be covered by the at-fault party if they have the proper coverage.
Comprehensive covers damage caused by perils other than collision. Some examples of coverage incidents include: falling objects, fire/explosion, theft, hail, water/flood, wind, safety glass damage, and striking an animal on the roadway. Carrying comprehensive coverage subject you to a deductible which you choose when buying the policy.
I bolded the safety glass damage because if your policy has Comprehensive coverage, then you also have glass coverage. However, many people think they don't have glass coverage if they don't see it written in the policy. When you have comprehensive coverage, but don't see a separate item for glass, that simply means that for any repairs or replacements to your safety glass, the comprehensive deductible will apply. You may see a $0 endorsement for glass notated on your policy, and that just means the policy has been endorsed that if you do file a glass claim for repair or replacement, the standard deductible doesn't apply.
At this time our agency does NOT recommend filling a glass claim, but rather getting cash prices from a local (non-corporate) glass shop and paying out of pocket. Small claims like these will add up and cause rate increases, and make it extremely difficult to shop for new rates.
Loss of Use/Rental Reimbursement
Loss of Use, another elective coverage, also called Rental Reimbursement is an elective coverage you can use if you are without a vehicle due to an accident. This coverage is on a daily payout basis, and a total payout basis. You'll normally see something like $50/day for up to 30 days, $1,500/accident. This means that insurance will pay up to $50 per day for costs you incurred for transportation like uber, taxi, bus tickets, etc... or most popular is up to $50 per day for a rental vehicle after an accident. The coverage amount is one you pick when you buy the policy. If you were not at-fault for an accident, this loss of use/rental reimbursement coverage would be paid by the responsible party's coverage.
Roadside Assistance
Most everyone is familiar with roadside assistance. This is an elective coverage that offers you assistance with certain break-down and lockout events. This coverage is usually provided on a per-occurrence basis of like $75/occurrence which means if you need a tow, or someone to help change your tire, the most insurance will pay for each occurrence is $75.
At this time, our agency does NOT recommend using insurance for roadside assistance claims, because like glass coverage these small claims do add up and will cause rate increases, and extreme difficulty when trying to shop for lower rates. We recommend enrolling in a roadside service like AAA (triple A), or Good Sam.
Arizona Minimum Limits of Liability
In the state of Arizona the minimum amount of acceptable liability coverage is - up to $25,000 for bodily injury to any one person, and up to $50,000 for injuries to two or more persons per incident, and up to $15,000 per incident for property damage liability.
At Oakley Insurance Group, we do NOT recommend the minimum limits of liability because they simply are not enough should a claim occur, and our agency will not write a state-minimum policy.
Our experienced professional agents at Oakley Insurance Group will work with you to make sure your vehicle and your family get the coverage you need.
If you have a new car to replace an existing one, or purchased a new vehicle to add to your policy, your existing policy is automatically applied to the new vehicle for a short time. Newly acquired auto's automatically have the same coverage as the other vehicles on your policy for 14 days, but it needs to be directly added to the policy within those 14 days.
Stupid Motorist Law - 28-910 - Liability for emergency responses in flood areas:
A.) A driver of a vehicle who drives the vehicle on a public street or highway that is temporarily covered by a rise in water level, including groundwater or overflow of water, and that is barricaded because of flooding is liable for the expenses of any emergency response that is required to remove from the public street or highway the driver or any passenger in the vehicle that becomes inoperable on the public street or highway or the vehicle that becomes inoperable on the public street or highway, or both.
C.) The expenses of an emergency response are a charge against the person liable for those expenses pursuant to subsection A or B of this section. The charge constitutes a debt of that person and may be collected proportionately by the public agencies, for-profit entities or not-for-profit entities that incurred the expenses. The person's liability for the expenses of an emergency response shall not exceed two thousand dollars for a single incident. The liability imposed under this section is in addition to and not in limitation of any other liability that may be imposed.
D.) An insurance policy may exclude coverage for a person's liability for expenses of an emergency response under this section.
Despite Arizona's "stupid motorist" law, Tucson area drivers insist on driving through floodwaters in June, July, and August, resulting in total loss of a vehicle, expenses for rescue extraction, and other property and personal liability.
