How does underinsured motorist coverage work in Arizona?

How does underinsured motorist coverage work in Arizona?

Underinsured motorist coverage is a type of insurance that helps protect you if you are involved in an accident where the at-fault driver does not have sufficient insurance to cover your damages. Arizona law requires all drivers to carry liability insurance to ensure that they can provide compensation for damages they cause in an accident, but unfortunately, not all drivers comply with this requirement. When such scenarios arise, underinsured motorist coverage steps in to bridge the gap.

Underinsured motorist coverage is optional in Arizona, but it is strongly recommended to purchase this coverage to safeguard yourself against potential financial burdens resulting from an accident with an underinsured driver.

How does underinsured motorist coverage work in Arizona?

Imagine you are driving along an Arizona road when another driver runs a red light and crashes into your vehicle. The accident leaves you with substantial medical bills and property damage. However, the at-fault driver's liability insurance policy has a coverage limit of $25,000, which is insufficient to cover your expenses.

If you have underinsured motorist coverage, you can file a claim with your own insurance company. The policy will then provide compensation for the remaining costs, up to the coverage limit you have selected.

It is important to note that underinsured motorist coverage only applies when your damages exceed the at-fault driver's liability coverage limit. If their coverage is sufficient, you will work directly with the at-fault driver's insurance company to negotiate a settlement.

The amount of underinsured motorist coverage you should carry depends on your personal circumstances and preferences. Arizona law requires insurance companies to offer underinsured motorist coverage limits equal to the liability coverage limits you have chosen. However, you have the option to reject or choose lower limits.

For example, if you have a liability coverage limit of $100,000/$300,000, your insurance company must offer you underinsured motorist coverage with the same limits. You can choose to increase or decrease those limits based on your needs, but it is generally recommended to match your underinsured motorist coverage with your liability coverage limits.

In Arizona, to utilize your underinsured motorist coverage, you must prove that the other driver is at fault for the accident and that their liability coverage is insufficient to cover your damages. This process typically involves providing evidence such as police reports, medical records, and repair bills to your insurance company.

It is important to act promptly and file a claim as soon as possible after the accident. Arizona has a statute of limitations for filing underinsured motorist claims, typically within two years of the accident date. Failing to meet this deadline may result in the denial of your claim.

When shopping for insurance in Arizona, it is essential to compare quotes and coverage options from various insurance providers to find the most suitable underinsured motorist coverage for your needs. Working with an experienced insurance agent can also help you understand the policy details and make informed decisions.

In summary, underinsured motorist coverage in Arizona provides crucial protection against financially insufficient drivers. It steps in when the at-fault driver's liability coverage is inadequate to cover your damages. While optional, it is highly recommended to add this coverage to your insurance policy to ensure you are sufficiently protected in case of an accident. Remember to carefully consider your coverage limits and promptly file a claim if necessary to access the benefits of underinsured motorist coverage.

Frequently Asked Questions

Underinsured motorist coverage in Arizona is an optional insurance coverage that provides protection if you are involved in an accident with a driver who does not have enough insurance to cover the damages. Here are some frequently asked questions about how it works:

Underinsured motorist coverage is an insurance policy that protects you if you are involved in an accident caused by a driver who does not have sufficient insurance coverage to pay for the damages. It helps to cover medical expenses, lost wages, and other damages that exceed the at-fault driver's insurance limits.

Underinsured motorist coverage is not required in Arizona, but it is highly recommended. Since Arizona is a "fault" state, the at-fault driver's insurance is typically responsible for covering the damages. However, if the at-fault driver has insufficient coverage, underinsured motorist coverage can provide additional protection for you and your passengers.

If you are involved in an accident with an underinsured driver, you would first file a claim with the at-fault driver's insurance. If their insurance does not fully cover your damages, you can then file a claim with your own insurance company under your underinsured motorist coverage. Your insurance company will step in to cover the remaining costs, up to the limits of your policy.

The amount of underinsured motorist coverage you should have depends on your individual circumstances. It is generally recommended to have coverage that matches your liability coverage limits, as this ensures you have equal protection if you are at fault or involved in an accident with an underinsured driver. However, you can choose the coverage limits that best suit your needs and budget.

No, underinsured motorist coverage typically does not cover property damage. It is primarily designed to cover bodily injury expenses, such as medical bills and lost wages. However, you can also purchase separate property damage coverage, such as collision or comprehensive insurance, to protect your vehicle in case of an accident.