Auto Insurance State Minimum Limits – Arziona: Why do I need anything higher?

January 15, 2016

In the state of Arizona, the law states that the minimum insurance requirements for bodily injury liability are $15,000 per person and $30,000 per accident, and 10,000 for property damage. In short this is written and spoken as 15/30/10. This coverage will provide bodily injury and property damage in the event of an accident that is your fault. The law is logical, since you would want someone who hit you to have coverage to repair your vehicle and cover your medical expenses. (As discussed in our uninsured and underinsured post, it’s necessary to have these two coverages in the instance where the person who hit you does not have insurance or enough insurance.)

The best way to explain this coverage and its implications is to give an example. A basic scenario is where you hit another vehicle and cause damage to the vehicle as well as to the occupants of the vehicle. If you only have the state minimum limits of 15/30/10, then there is only $10,000 to cover damage to their vehicle. If you caused more than $10,000 worth of damage to their vehicle, you don’t have enough insurance to cover those damages. Obviously there are some instances where $10,000 would be enough, especially with smaller accidents and older (but not antique) vehicles. There are a lot of expensive vehicles out there, as well as many accidents which cause more than $10,000 in property damage. In addition, if the person you hit needs to go to the hospital, and then multiple other visits to a doctor and a chiropractor, there are going to be a lot of expenses there. With only $15,000 per person, you may not have enough coverage, especially if there are multiple people in the car. With a maximum of $15,000 per person and $30,000 per accident, there isn’t much coverage to go around if there are multiple occupants or multiple vehicles involved.

If you don’t have enough coverage, there are a couple different ways that this scenario will end. The first, and also the worst, is that the other person sues you for the additional damage and medical costs. Included in this, is the possibility of them garnishing your wages until the full amount is paid. The second option, is that the person decides to file the claim through their own insurance and have their underinsured portion cover their bodily injury. The problem here, is that the insurance company may then decide to sue you, and it could still result in a large loss for you or them garnishing your wages. There are other ways that this situation may go, but these are the main two that need to be mentioned.

In conclusion, the wise choice is to have higher liability limits to protect yourself against the unknown. Generally the difference from one level of liability limit to the next is not a substantial premium difference, and well worth it in the end. Here at Pinnacle Insurance Agency, we avoid writing any insurance with liability limits lower than 100/300/100. Please always follow the law, but consider increasing your limits to protect yourself and those around you from future distress.

Disclaimer: Not all insurance policies are the same. Coverages and exclusions may vary and all statements made here are based of off a normal auto policy. As of 2016, Arizona does legally require bodily injury and property damage coverage at 15/30/10 but does not require uninsured or underinsured motorist coverage. Within our agency we will not write an auto policy without uninsured or underinsured motorist coverage. Please always follow the law.