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Types of Motor Vehicle Insurance Coverage in Arizona

In Arizona, the collective cost of car accidents was an estimated $18.5 billion dollars 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 an extremely huge economic impact on Arizona, both at the macro level and at the individual level. Unexpected victims can be left with mounting bills and no clear way to pay them.

On the bright side, there are various types of insurance policy coverages that can help with these costs. Additionally, a personal injury 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
What are the minimum insurance requirements in Arizona?

As a resident of Arizona, you're required to have Bodily Injury Liability and Property Damage Liability. All other insurance policies are optional.

Required Insurance Coverage in Arizona

(Keep in mind that these requirements changed in July 2020.)

Bodily Injury Liability

Bodily Injury Liability (BIL) coverage is required in Arizona and helps cover expenses for any injuries-or the wrongful death -of another driver or a pedestrian from an accident that was deemed to be your fault. In Arizona, you are required 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 own medical expenses if you are involved 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 your car is wrecked in some other way. With collision coverage, your insurer will pay to repair these damages even if the collision is your fault.

Comprehensive Coverage

Comprehensive coverage helps cover expenses to repair or replace your vehicle after damage that was not related 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 are trying to figure out how much your insurance rate is going to be, it is important 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 simply 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 are permitted to use your zip code when calculating what rate they will offer you. A 2018 consumer report unfortunately found that people who live in lower-income areas are given higher rates. This is definitely a problematic concept. The justification is that vehicle crash statistics, crime rates, and population density, along with higher rates of auto theft and fatal accidents, all play a factor in the risk for the insurance carrier.

Your Demographics

If you've ever rented a car, you may have noticed that many rental companies charge additional fees for drivers who are under 25 years old. That's because younger drivers tend to be 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 definitely play a role in determining insurance rates.

Driving History

One's driving history definitely 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 record of safe driving will ensure that your rates are kept 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 a policy is cancelled, either for non-payment or some other reason. Sometimes a lapse happens when a driver is switching from one company to another. When calculating the rates they'll offer, insurance companies look at your coverage history and factor that into the price you are going to pay.

What are the consequences of driving without car insurance?

Arizona requires all drivers to carry a minimum amount of car insurance. If you are caught driving without insurance in Arizona, you could 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 you are caught driving without insurance in Arizona, you will be fined up to $500 for the first offense. If you are caught multiple times, the fine can increase to as much as $1000.

2. License Suspension

Along with fines, people who choose to drive without auto insurance will also face the loss of their driving privileges. This means that a driver would lose their driver's license, registration, and license plate. For a first offense, the suspension is 3 months, but it can go all the way up to 1 year for multiple violations. These suspensions also come with their own fees since you would have to pay to prove coverage and pay to get your driving privileges reinstated.

(It should be noted 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 6 months worth of insurance coverage.)

3. SR-22 Certificate

Even for a first offense of driving without insurance, a driver may be required by the courts to get something known as an SR-22 certificate (also known as a Certificate of Financial Responsibility). An SR-22 acts as proof that a driver has acquired and retains the minimum amount of automobile insurance in Arizona. Being required to get an SR-22 certificate also has its own financial penalties since being required to obtain this document almost surely means your monthly insurance premiums will go up. If an SR-22 certificate is required, Arizona law states that a person must keep it for 3 years, which means at least 3 years of increased insurance costs.

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

  • They are caught 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 that 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, there are a few other reasons that you should never drive without proper coverage.

  • Risk of a Motor Vehicle Accident. If you are involved in a traffic accident with another vehicle, bicyclist, or pedestrian during a period that you do not have proper insurance coverage, you could face serious financial consequences. If you were at-fault for the accident, you will be held 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 caught driving without insurance, the price of your monthly insurance premiums will likely go up. In the end, this could end up costing you more.
  • Fee and Fine Costs. If you do not have proper insurance coverage and you are stopped by a police officer or involved in an accident, you could face the suspension of your driving privileges, as mentioned above. This not only means that you will lose your ability to legally drive yourself around, but you will also eventually have to pay reinstatement fees, late fees, and miscellaneous other fees, all of which end up costing you more in the end.
Contact an Experienced Phoenix Car Accident Lawyer

We hope that this article has helped 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, insurance coverage is extremely important in paying for both your own damages and the damages you cause to others during a Phoenix car accident.

If you or a loved one was injured in a car accident, contact the experienced car accident attorneys at Abels and Annes in Phoenix. Whether the at-fault driver was uninsured or does not have enough insurance to cover your medical bills, we will help you find a way to recuperate the damages you suffered. We can be reached by filling out our online contact form or by calling us at (855) 749-5299. We look forward to speaking to you soon.

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