As the state of Arizona continues to work on reopening, it is important for you to review your auto insurance policy. You want to make sure that you have sufficient coverage to handle potential challenges that may arise and that you are prepared for the changes you can expect in the upcoming months in state laws and standards.
Coverage for Auto Insurance
Auto insurance coverage breaks down into four primary components in Arizona: bodily injuries, property damage, uninsured motorist, and underinsured motorist coverage. As a general rule, any insurance policy you obtain will have coverage for bodily injuries and property damage, or liability coverage, if you cause in an accident. The state laws require you to carry coverage on your vehicle for liability risks.
That raises a single question: what is UI and UIM coverage? Uninsured Motorist, or UI, coverage protects you and your passengers from the financial challenges that may arise when an accident is caused by an individual who does not have auto insurance. Underinsured Motorist, or UIM, coverage offers additional financial protection if the individual causing an accident does not have sufficient coverage to pay for the property damage or injuries he or she caused in an accident.
Comprehensive coverage offers insurance protection for situations that may not relate to accidents, such as theft or vandalism. You should be aware that you can add a variety of different coverage options to your insurance policy if you have specific concerns about risks to your vehicle.
Why Do You Need UI and UIM Coverage?
The Insurance Information Institute suggests that roughly 10 to 15 percent of drivers are uninsured. If you are involved in an accident with someone that is either uninsured or underinsured and you or your passengers are injured, you will need to rely on UI and UIM to cover those losses.
Due to the situation with COVID-19, many insurance providers are offering discounts or deferred billing to their customers. The discounts relate to the reduced amount of driving and the lower risks involved when drivers are staying home or spending less time on the roads. With regard to deferred payments, companies will require individuals to make a payment on their deferred bills at some point. When it comes time to “catch up” on deferred bills, the large amount of premium due at one time may result in drivers reducing their coverage or eliminating their coverage on a vehicle. The situation may result in more uninsured and underinsured drivers. That is why we recommend that you obtain appropriate coverage to handle the added risks that may arise from uninsured or underinsured drivers.
Changes to Arizona State Insurance Laws
As you evaluate your insurance coverage for a vehicle, you will want to be aware of the changes to Arizona’s state laws to ensure that your vehicle in is properly covered. On the first of July, Arizona will be increasing the minimum coverage requirements from $15,000/$30,000/$10,000 to $25,000/$50,000/$15,000. As a general rule, you want to purchase much higher limits than those required to ensure you are properly covered. It is particularly important in Arizona that you purchase sufficient coverage for uninsured and underinsured motorists.
Checking Your Coverage
Your insurance policy should have coverage for liability risks if you cause an accident. That means your insurance will pay for injuries to another person and their passengers if you cause an accident. You also have coverage for damage to another person’s property. You want to make sure you have a reasonable amount of liability coverage to limit the financial risks of a severe or major accident since the minimum coverage in Arizona is limited.
We recommend that you also consider additional coverage for uninsured and underinsured motorists, as well as personalized coverage for your own vehicle based on your situation and needs. For example, you may consider additional coverage for collisions, vandalism, or theft. By evaluating your current policy, you can determine when to make changes to ensure that you are ready for the next phase of reopening in Arizona.
When you are ready to evaluate your insurance policy, the Don Neeley Agency is ready to answer your questions and help you find the right options for your needs. To learn more about auto insurance in Arizona, contact us today.