For many Arizona drivers like you, choosing an auto insurance policy comes down to one factor: price. To keep your monthly premiums low, you may opt to carry the minimum the law allows. While this may keep you legal on the road, it can often leave you financially vulnerable after a serious accident.
Understanding the limits
In Arizona, the law requires drivers to carry liability insurance that matches or exceeds 25/50/15 minimum limits. Here is what 25/50/15 means:
- $25,000 for death or injury per person in each accident
- $50,000 for total death or injury per accident
- $15,000 for damage done to others’ property in an accident
The coverage acts as the limit your insurer pays if you are liable for an accident.
Medical costs are too high
The state minimums for injuries may look high at first glance, but these sums can disappear quickly in serious crashes. Medical treatments can rack up bills that are easily thousands of dollars in fees. A single night in an intensive care unit, an emergency surgery and other procedures can easily exceed $25,000.
If a court finds you liable for causing a serious injury, you are responsible for the remaining balance once your insurance limit is reached.
Repair expenses are costly too
On the other hand, the $15,000 minimum insurance limit for property damage is risky in today’s economy. The average price of new vehicles can easily run over $15,000. If you total a car in an accident, the $15,000 coverage would only pay a fraction of the replacement cost. The vehicle owner (or their insurance company) can pursue you personally for the tens of thousands of dollars remaining.
Personal assets at risk
Arizona follows an “at-fault” system to determine liability in car accidents. This means that if your insurance coverage cannot fully cover damages you caused, an injured party can sue you. They may pursue the remaining amount from you personally. It can involve lengthy negotiations, settlement pressure or even a lawsuit. You may end up losing personal assets.
While state minimum insurance satisfies legal requirements in Arizona, it is rarely enough to provide true financial security. Thus, you may want to explore additional options for protection. For example, Arizona law requires insurers to offer Uninsured Motorist (UM) and Underinsured Motorist (UIM) coverage in writing. UM/UIM coverage can provide additional protection to you when state limits are low.
Consider consulting a legal representative right away when faced with substantial insurance claims.