Terms like “full coverage” can be somewhat ambiguous and misleading. Typically, when someone says “full coverage,” they mean liability, comprehensive, and collision. That may cover some of the basics, but you’re failing to protect yourself and occupants from bodily injuries caused by uninsured drivers.
Is it Enough?
While the legal minimum insurance is enough to get you on the road and allow you to drive legally, it won’t do much else. The current mandatory minimum insurance limits in Arizona are:
- At least $15,000 per person in bodily injury liability insurance
- At least $30,000 in total bodily injury liability insurance per accident
- At least $10,000 in property damage liability insurance
However, On May 27th, 2019, Senate Bill 1087 was passed by the Arizona legislature and signed into law by Governor Doug Ducey, increased Arizona’s minimums as follows:
- At least $25,000 per person in bodily injury liability insurance
- At least $50,000 in total bodily injury liability insurance per accident
- At least $15,000 in property damage liability insurance
These changes will apply to policies purchased and/or renewed after July 1, 2020.
If these numbers seem surprisingly low, that’s because they are. The new minimum limits provide slightly more coverage, but they still won’t stretch very far. The dollar limit associated with each coverage is the maximum amount that can be paid per incident. With the technology is most autos today, it doesn’t take much to total a vehicle or at least rack up large repair costs that would easily exceed both the current property damage limit of $10,000 and the NEW increased limit of $15,000.
Something else to consider is Arizona’s uninsured driver rate which consistently hovers around 12%. This appears average when you consider the national average is around 10% to 15%. According to data from the Insurance Information Institute, the worst states for uninsured motorists include Florida, at 26.7%, and New Mexico, at 20.8%,
When you see a major economic spike or dip, you see the uninsured numbers climb. When the economy is looking up, you have more people paying off their past-due bills and maintaining proper insurance coverage. When the economy is on the decline, you tend to see policies cancel, coverage reduced, and the uninsured motorist percentage climb.
Unusual Times and Comprehensive Measures
What we have right now is an unusual situation wherein the economy has taken a sharp decline owing to a severe global crisis. Many drivers, drivers who have generally held onto the same job for years and never had a problem paying their premiums on time, may be out of work. If not permanently, then at least temporarily. This means that they may not be able to pay their insurance premiums.
What’s more, you have insurance companies deferring billing. A great way to retain customer loyalty in the short term, but in the long term, those bills have to be paid someday. And of course, when you have several months of insurance premiums to pay all at once, you might or might not be able to pay them.
In short: the number of uninsured and underinsured motorists may soon hit a major spike. Yes, many drivers will simply take a break from the road until they can pay off their past-due bills. But many won’t. Many will reduce or outright cancel their coverage and continue driving, taking their chances, and increasing yours of being hit by an inadequately insured driver. Either by necessity or simply by choice, some of your fellow drivers may be driving without the means to protect you should they hit you.
The legal minimum, old or new, is rarely going to be enough to cover all the expenses resulting from an accident. However, including uninsured and underinsured bodily injury coverage will certainly provide you much needed coverage that will make a world of difference to you if you need it.
If you have any questions give us a call or reach out via email get in touch with Imes Insurance Associates and let’s see what we can do for you.