Raul: What is the state minimum coverage for automobiles?
David: $15,000/$30,000, liability coverage.
Raul: What does that mean?
David: If you cause a collision [meaning that it is your fault] with another automobile, building, etc., the insurance coverage that the state requires will pay the party not at fault the sum of $15,000. If there are more than one injured not at fault, the insurance company’s obligation is to go up to $30,000 for that collision. This mean, if there are 5 injured parties they would share in the $30,000.
Raul: So the state minimum coverage only attempts to protect the parties that are not at fault for a collision. Correct?
David: Yes that is correct. It is liability insurance coverage for the parties not at fault.
Raul: What do I need to insure my vehicle, myself and others in my automobile?
David: This is more than one question. I will start with collision insurance.
Collision insurance covers your automobile up to the limits that your purchase. Suppose, for example, that your own a vehicle that is worth $20,000 and you purchase a $5,000 collision insurance portion of the policy. Your insurance carrier, regardless of fault by you, would pay you $5,000. If your vehicle is totaled, you are out of pocket for the difference, or still owe the lien holder, the balance of whatever you then owe on the vehicle. One of the ways to protect the value of your vehicle is to purchase replacement coverage.
Of course, if you are not at fault, you should be able to collect the full value of your vehicle. You will need to prove the value of the vehicle and you can count on the insurance carrier’s agent to place a lower value than you believe the vehicle is worth. You can use appraisals from repair facilities, online values of comparable vehicles from various sources, the newspapers for similar vehicles, etc.
Raul: What are some of the other insurance coverage available to the owner of a vehicle involved in a collision?
David: Rental car insurance. Regardless of who is at fault in a collision, there is a strong likelihood that you will be without a vehicle while repairs are being made or a replacement found. You should consider adding rental car coverage. Usually this is up to 30 days and at a certain rate.
Raul: What are some of the other automobile policy insurance that I might want to consider:
David: Medical Payments coverage. Settling claims can take a minimum of 6 months to over 2 years. During that time, in most collisions, some medical treatment is required. If you add a medical payments coverage to your policy of $5,000 to $10,000 or more, then your medical providers can receive payment promptly. Under Arizona law, insurance companies are permitted to recover from any settlement you make with the party at fault for amounts above $5,000; not all companies do seek repayment.
Raul: Suppose I have a collision and I am not at fault, the other driver is, and I have medical expenses, loss of income, and pain and suffering damages exceeding the state minimum requirements of 15/30, how do I protect myself?
David: One of the least expensive parts of an insurance policy is what is known as underinsured coverage that you can purchase in amounts of $50,000, $100,000 and more. In order to receive the benefits of underinsured coverage on your policy, you must demonstrate that you received the policy limits from the party at fault.
Raul: What if the party at fault has no coverage at all?
David: In order to protect yourself from a party at fault who has no insurance coverage at all [estimates are that some 25% to 35% of the drivers in Arizona have no coverage], you should purchase uninsured coverage with your policy. Again, this is one of the least expensive portions of any policy. You can purchase in amount of $50,000, $100,000 and more.