Uninsured Motorist Coverage and Underinsured Motorist Coverage

This is a question I hear very often: "Arizona requires that drivers have insurance; why do I need to insure an uninsured driver?" The answer is simple: you aren't! You are protecting yourself, not them.

In Arizona, Un/Underinsured Motorist coverage pays for YOUR injuries, or YOUR PASSENGER'S injuries, if you are hit by someone without insurance or without enough insurance. It has to be their fault. It does not pay for damage to your car. Just covers your injuries.

Why do you need this coverage when the state requires that drivers have insurance?

What if the other driver didn't pay their insurance bill and the policy cancelled? Or if they stole the car they just hit you with? What if they are a hit-and-run driver? That is considered an uninsured motorist, too. I am sorry to tell you that there are a lot of people driving without insurance in force.

Underinsured Motorist pays for injuries after the other person's insurance is exhausted. Once again, it has to be the other driver's fault. State minimum is $15,000 per person and $30,000 for the entire accident for bodily injuries. Suppose the at-fault driver causes a pile-up of several cars, maybe 6 people injured. That could potentially mean each injured person would get $5,000 of their medical bills paid. Five thousand. How much does a trip in the ambulance cost these days? Maybe it is only your one vehicle, but you have three passengers. Now you might get $7500. 

Many people feel comfortable rejecting Un/Underinsured Motorist Coverage because they have health insurance. That can be a perfectly logical and reasonable decision. Don't discount what Un/Underinsured Motorist Coverage would mean for your passengers who may not have the health insurance you do. And consider what your co-pays, deductibles and other expenses not covered by health insurance might be.

In a perfect world, every driver would have adequate liability limits, an active policy and excellent driving skills. Until that perfect world arrives, talk to your insurance agent about uninsured/underinsured motorist coverage.

Trish


We are offering general information and opinions. Talk to your insurance professional for questions and concerns about your insurance policy.