Types of Motor Vehicle Insurance Coverage in Arizona

In Arizona, the collective cost of car accidents was an estimated $18.5 billion in 2019. Motor vehicle crashes and their economic implications have a huge impact on victims and their families due to medical bills, lost wages, and property damage repairs.

These costs include:

  • $9.3 billion for fatalities
  • $1.9 billion for serious injuries
  • $3.1 billion for minor injuries
  • $3 billion for possible injuries
  • $981 million for property damage

*Source: Arizona Motor Vehicle Crash Facts 2019

As you can see, car accidents and the injuries and deaths that they cause have a huge economic impact on Arizona, both at the macro level and at the individual level. Unexpected victims can face mounting bills and no clear way to pay them.

Various insurance policies can pay these costs. Additionally, a car accident attorney can help you sort out how all these different types of insurance coverages affect your claim.

In this article, we will go over:

  • Minimum Insurance Requirements in Phoenix
  • Additional Insurance Policies Available in Phoenix
  • Factors that Affect Insurance Rates in Phoenix
  • Consequences of Driving Without Insurance in Phoenix
  • Seeking Help from a Car Accident Lawyer for the Insurance Claim Process

Required Insurance Coverage in Arizona

So what are the minimum insurance requirements in Arizona? (Keep in mind that these requirements changed in July 2020.) As a resident of Arizona, you must have Bodily Injury Liability and Property Damage Liability. All other insurance policies are optional.

Bodily Injury Liability

Bodily Injury Liability (BIL) coverage is necessary in Arizona and helps cover expenses for any injuries - or the wrongful death - of another driver or a pedestrian from an accident that was your fault. In Arizona, you have to carry at least $25,000 per person and $50,000 per accident in BIL.

Property Damage Liability

Property Damage Liability coverage helps cover expenses for the damage to another person’s vehicle when the accident is your fault. Arizona requires a driver to carry a minimum of $15,000 in Property Damage Liability coverage.

Optional Insurance Coverage in Arizona

Underinsured/Uninsured Motorist Coverage

Underinsured/Uninsured Motorist Coverage helps cover your medical expenses if you are in a car accident that was the other driver’s fault, and they either do not have any insurance or don’t carry enough insurance to cover your medical bills.

Medical Expenses Coverage

Medical Expenses Coverage (MEC, or sometimes called medical payments insurance) reimburses you, your passenger, and any family members who may have been driving the car for medical expenses related to the accident. This coverage applies regardless of who was at fault for the accident. Medical expense coverage pays for:

  • Doctor visits
  • ER visits
  • Hospital stays
  • Ambulance and EMT services
  • Surgery
  • Diagnostics
  • Chiropractic care, among other medical-related expenses

MEC also covers funeral costs in the event of a fatal accident, which can cost on average $6,000+ in Arizona.

Collision Coverage

Collision coverage pays if your vehicle collides with an object or another car or if something else wrecks your vehicle in some other way. With collision coverage, your insurer will pay to repair these damages even if you caused the collision.

Comprehensive Coverage

Comprehensive coverage helps cover expenses to repair or replace your vehicle after damage unrelated to a collision, like theft, broken windshield, fire damage, windstorm, hail, water, falling objects, vandalism, explosion, or hitting an animal.

What factors affect your car insurance rate?

When you try to figure out your insurance rate, you need to understand what factors affect your car insurance rate. Insurance rates can be relatively expensive for many people. Some of the most common elements that affect how much you will pay for insurance include:

The Type of Vehicle You Own

Luxury vehicles cost more to insure because they cost more to repair or replace after an accident. However, vehicles don’t have to be extravagant to have a pricey insurance rate. If you drive a vehicle model that frequently gets into accidents, your insurance may be higher even if you’ve never personally been in an accident. For instance, some SUV models are known to be more likely to roll over because of their weight distribution.

Where You Live When You Buy Insurance

Insurance companies can use your zip code when calculating what rate they will offer you. Unfortunately, a recent consumer report found that people who live in lower-income areas have to pay higher rates. Insurance carriers claim that vehicle crash statistics, crime rates, population density, higher rates of auto theft, and fatal accidents all play factors in setting rates.

Your Demographics

If you rented a car, you might notice that many rental companies charge additional fees for drivers who are under 25 years old. That’s because younger drivers are more accident-prone. Similarly, insurance companies typically have higher rates for inexperienced drivers. Your credit score is also a factor that many insurance companies consider.

Unfortunately, a low credit score can mean heftier rates. Gender and education level are two additional characteristics insurance companies may consider. Women may pay slightly less than their male counterparts. The higher your education level, the less you pay. Whether these concepts are justified is a conversation for another time, but they play a role in determining insurance rates.

Driving History

One’s driving history plays a role in the amount you will pay for auto insurance. A history of reckless driving, traffic violations, and DUIs can add up when it comes to how much your insurance premiums will be. On the other hand, a safe driving record will keep your rates lower.

Lapse in Insurance

A lapse in insurance coverage is any period when your registered vehicle doesn’t have proper coverage. This can happen when an insurer cancels a policy, either for non-payment or some other reason. Sometimes a lapse happens when a driver switches from one company to another. When calculating the rates they’ll offer, insurance companies look at your coverage history and factor that into your premium.

What are the consequences of driving without car insurance?

Arizona requires all drivers to carry a minimum amount of car insurance. If authorities stop you while driving without insurance in Arizona, you can face fines and a suspension of your driving privileges. You may also have to file an SR-22 certificate proving to the state of Arizona that you obtained proper insurance coverage.

1. Fines

If police officers catch you driving without insurance in Arizona, you can face fines up to $500 for the first offense. If the police catch you multiple times, the fine can increase to $1,000.

2. License Suspension

Along with fines, people who drive without auto insurance will also lose their driving privileges. This means that a driver can lose their driver’s license, registration, and license plate. For a first offense, the suspension is three months, but it can go all the way up to one year for multiple violations. These suspensions also come with fees since you will have to pay to prove coverage and pay for the reinstatement of your driving privileges.

(Note that a person can ask a court to waive any fines or suspension if the driver has a good driving record and can prove that they purchased at least six months’ worth of insurance coverage.)

3. SR-22 Certificate

Even for a first offense of driving without insurance, a driver may have to obtain an SR-22 certificate (also known as a Certificate of Financial Responsibility). An SR-22 proves that a driver acquired and retains the minimum amount of automobile insurance in Arizona. Getting an SR-22 certificate also comes with financial penalties since obtaining this document almost surely means your monthly insurance premiums will go up. If an SR-22 certificate is necessary, a person must keep it for three years, which means at least three years of increased insurance costs.

In addition to driving without insurance, a driver may have to get SR-22 insurance in AZ if:

  • They are driving under the influence of alcohol or drugs (DUI/DWI)
  • They decide to continue driving with a suspended or revoked license
  • They have multiple unpaid traffic tickets
  • They have too many points on their license

Other Reasons Not to Drive without Car Insurance in AZ

Most people cite cost as the reason they do not have auto insurance coverage. However, saving money on monthly premiums now can mean paying much more later.

In addition to the penalties listed above, you should never drive without proper coverage because of:

  • Risk of a Motor Vehicle Accident. If you are in a traffic accident with another vehicle, bicyclist, or pedestrian during a period that you do not have proper insurance coverage, you can face serious financial consequences. If you were at fault for the accident, you will be accountable for any damages, including medical bills, property damage, and other liability costs.
  • Increased Insurance Cost. Most people risk driving without insurance because of a lapse in coverage due to an inability to pay. But if you let your insurance lapse, or you are driving without insurance, the price of your monthly insurance premiums will likely go up. In the end, this can end up costing you more.
  • Fee and Fine Costs. If you do not have proper insurance coverage and police stop you or you find yourself in an accident, you can face the suspension of your driving privileges, as mentioned above. This not only means that you will lose your ability to legally drive, you eventually must pay reinstatement fees, late fees, and miscellaneous other fees, all of which end up costing you more in the end.

Seeking Help From a Car Accident Lawyer for Your Insurance Claim

Even if you have the right insurance coverage, the process of filing a car accident claim is still complicated.

This is true whether you have to:

  • File a claim against a negligent driver’s insurance
  • File a claim with your uninsured/underinsured motorist policy
  • File a property damage claim unrelated to an accident

Whether it is your insurer or another driver’s, you should never expect the process to go smoothly. All insurance companies are for-profit businesses, which means that they prioritize profits over the well-being of their claimants. They profit by limiting payouts on claims, so an adjuster can make it difficult to recover the benefits you deserve.

Insurance companies can use many tricks and tactics to limit or deny car accident claims, such as:

  • Questioning liability for the crash
  • Challenging the value of your losses
  • Alleging that your injuries are not as severe as you claim
  • Challenging future estimated losses
  • Stating your injuries were pre-existing
  • Asserting that you were partially responsible for the accident

Insurance companies try to get you to make statements they can use against you and your claim. If you allow a car accident attorney to handle the claim process for you, it decreases the chance that you say something to jeopardize your claim. If you are dealing with serious injuries and other fallout from your crash, a car accident lawyer will take the stress of the claim process off your shoulders.

Contact an Experienced Phoenix Car Accident Lawyer

We hope that this article helps clarify the different types of motor vehicle insurance coverages required in Arizona, how different factors can affect what you pay for insurance, and the penalties for driving without insurance. The simple fact is, you need insurance coverage to pay for both your damages and the damages you cause to others during a Phoenix car accident.

If you or a loved one suffered injuries in a car accident, contact the experienced car accident attorneys at Abels and Annes in Phoenix. Whether the at-fault driver had no insurance or not enough insurance to cover your medical bills, we can help you find a way to recuperate the damages you suffered. You can reach us by filling out our online contact form or calling us at (602) 819-5191. We look forward to speaking to you soon.