Uninsured and Underinsured Motorists Insurance Coverage
Every Arizona auto insurance company is required to offer their customer/insured's “UM” or Uninsured Motorist coverage and “UIM” Underinsured Motorist coverage. (A.R.S. §20-259.01) UM covers all persons insured under the policy in the event they are in a car accident and the driver at fault for the accident has no insurance.
UIM covers all persons insured under the policy in the event they are in a car accident and the driver at fault for the accident has a small insurance policy that is not enough to pay for all the damage they have caused.
In Arizona, these two scenarios can happen quite often. There really is little consequence to one with little or no insurance in the legal system. The driver without insurance will face misdemeanor charges for not having insurance and they will lose their driver's license. However, many who have already had their driver's license suspended drive anyway often without insurance. There are very few legal consequences for those have too little insurance.
It is very important that you ask your agent or look at your policy to make sure you have this coverage. UM and UIM are sold together and it should be in the same amount as your “liability limits”. In other words, the limit of coverage you have if you cause bodily injury or death to someone else in a car accident.
Remember, a higher amount of coverage not only protects you against suits from others in a car accident, but It also can protect you (provided you did not cause the accident), your family members whether or not they driving or riding in a family car or another's car and your friends riding in your car when an accident occurs.
All insurance coverage is sold with a “per-person” limit and a “total loss” limit. In Arizona until July 1, of 2020 the minimum coverage required to be “legal” is $15,000.00 per person or $30,000.00 per accident or total loss written as 15/30. However, you can buy coverage in much higher amounts such as 50/100 or 100/300 etc. In 2020 the minimum limits are going up to 25/50. I will provide a couple of examples.
Example 1: You and your minor daughter are driving to an event and your car is T-boned by someone making a left turn long after the turn arrow had changed. You both are injured. You have medical bills for $32,000.00 and lost wages $6,500.00. Your daughter has medical bills of $40,000.00 and is traumatized by the experience. The at-fault driver already has a suspended license and no insurance. If you have UM coverage, then you could collect from your auto policy in an amount not more than your liability limit. If you had only 15/30 UM, then you and your daughter would each be able to receive $15,000.00 from your insurance for a total payout of $30,000. Most would agree that your two cases are at least worth $15,000 each. Hardly enough to cover all of the losses. If you had 50/100 then both you and your daughter would be eligible to receive $50,000.00 each for a total of $100,000. Still not enough but closer to making you whole financially. If you had 100/300 you each would have available to you $100,000.00 and have to assert that each claim was worth at least $100,000. As your coverages
increase then so does the fund.
Example 2: We refer to the same accident however this time the at-fault driver did have insurance, but it was the state minimum of 15/30. If you have UIM coverage, then you could collect from the at-fault driver and also your own auto policy. Your own policy would get a credit for the amount paid by the at- fault driver's insurance against your total case value. If you had only 15/30 UIM then you and your daughter would each be able to receive $15,000 from the at-fault driver and $15,000 from your insurance company for a total settlement of $60,000. Again, not enough to cover all of the losses. If, you had 50/100 then you both would be eligible to receive $65,000.00 each. $15,000 from the at fault insurance and $50,000 from your UIM insurance for a total settlement of $130,000. If you had 100/300 you would receive $15,000 each from the at fault and you each would have an additional UIM available to you $100,000. You would have to make your case that your carrier should pay you that policy limit and must demonstrate that each of your cases are worth is at least $115,000. If they are worth more, you simply get the $115,000. If they are worth less say $90,000.00 you get the value by receiving the $15,000 from the at-fault insurance and $75,000 from your insurance company.
It also important to note that there are statute of limitations for these liability cases and exceptions and multiple legal issues that outline to the general rules above.
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