Raising Arizona's Minimum Limits Coverages

For forty plus years Arizona’s minimum limits for auto insurance have been 15,000/30,000/10,000.  What this means that each owner of an automobile is to carry insurance that will pay up to $15,000.00 in personal injury damages to per person injured in an accident due to driver’s fault.  If the driver injures multiple parties the $30,000 represents the most the driver’s insurance will pay to the multiple parties.  Meaning if driver causes an accident and injures 3 people, the aggregate sum the insurance will pay for the injury claims is $30,000.00.  Meaning if one of the injured individuals has a damage claim of $100,000, the vehicle owner’s personal assets are exposed, and likely the injured party will not be fully compensated for their injuries.

The last number $10,000.00 represents the maximum the driver’s insurance will pay for property damage the driver causes.  For example if a driver rear ends a 2014  Mazda 3 (a $20,000.00)  vehicle and damages the vehicle beyond repair (total loss), the owner of that Mazda is entitled to recover the actual cash value of the Mazda.  If the at fault driver is carrying the minimal limits, the most the Mazda owner can recover is $10,000.00.

Currently there is a ongoing grassroots movement to create the awareness and necessity to increase Arizona’s minimal limits regarding auto coverage. During the Arizona legislature’s previous session, Ethan Orr (R) from Tucson introduced legislation that would amend the current law and increase the minimal limits to $25,000/$50,000/$20,000.00.

Opponents to the increase argue that this corresponding increase will naturally increase policy rates and thus even less people will purchase the minim limits and there will be even more uninsured driver’s on the streets.

A recent published study suggest that would not happen.  For example Florida  who has one  lowest limits(10/20/10) in the nation and it has an uninsured motorist rate of 15-26%.  Compared to Minnesota who has limits of 30/60/10 has an uninsured rate between 9% and 11%.  Similarly Maine which has limits  50/100/25 has an uninsured rate less than 10%.

At the end of the day, the current limits do not correspond to today’s economy.  There are only four other states with current financial responsibility laws as old as or older than Arizona.