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Introduction
While different insurers use different terms in
naming some of the coverage's they offer, we have used
the terms that are most often used. These questions and
answers only address issues in general and are not
intended to be specific. Customers for insurance should
carefully read their policies and consult with an
insurance agent or producer or insurer to determine the
exact coverage's required.
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Reasons to
Buy Auto Insurance
Why should I buy auto insurance?
Before you can register a vehicle in Arizona, you must
show proof of financial responsibility. This can be in
the form of a certificate of insurance, a bond, or
certificate of deposit or cash in the amount of $40,000.
What auto insurance coverage's are required and
what are the minimum limits I can purchase to satisfy
Arizona's financial responsibility requirements?
The required coverage's in Arizona are Bodily Injury and
Property Damage. The minimum required limits are $15,000
per person and $30,000 per accident for Bodily Injury
and $10,000 per accident for Property Damage.
Ways to Reduce Premium
I have not had any accidents or violations,
so why do my auto insurance premiums continue to
increase?
An insurer's premium increases are a direct reflection
of the countrywide or statewide pool of losses that the
insurer experiences. The losses of the few within the
insurer's pool of policyholders are paid for by all
policyholders within the pool. This is the basic premise
upon which the concept of insurance is based and without
which no insurance would be available. This does not
mean that your own favorable loss experience cannot be
recognized. Various insurers give numerous discounts to
policyholders which recognize their excellent driving
records. (See next question for type of discounts.)
Other reasons for the increase in the cost of auto
insurance are attributable to the costs to settle losses
such as the costs to repair vehicles and the medical
costs for injured persons which continue to rise. The
increase in lawsuits is also a major factor in insurer
rate increases.
Is there any way that I can reduce my premiums?
Take advantage of the discounts offered by your insurer.
Most insurers provide discounts for at least some of the
following: accident free drivers discount; a package
discount for insuring your home and auto with the same
insurer; multiple auto discount; good student discount;
nonsmokers discount; and passive restraint discount (for
vehicles with air bags or automatic seat belts). You may
also consider higher deductibles for your comprehensive
and collision coverage's.
Liability Coverage
What is covered under Bodily Injury coverage?
This coverage pays for bodily injury to others for which
you become legally responsible due to an auto accident
in which you were involved. It does not pay for bodily
injury you may sustain. You would need to have Medical
Payments coverage in order to have the injuries you
sustain in an auto accident covered under an auto
policy.
Does Property Damage coverage provide coverage
to fix my vehicle if the other driver is at fault and
has no insurance?
No. Property Damage coverage protects you for damage you
may cause to the vehicles or property of others. You
would need to have Collision coverage on your auto
policy in order to have coverage to fix or replace your
vehicle in this situation.
Will my policy provide coverage if my teenage
son, who does not have a license yet, or a relative from
out of town, drives my car and has an accident?
As long as you give your permission, anyone who drives
your vehicle (as long as that person is not specifically
excluded) will be covered under your policy, but you
will need to review your policy to see what situations
are excluded.
What coverage is provided if I pull a trailer
with my vehicle?
In most cases, if the vehicle pulling the trailer is
covered under the policy, the liability coverage will be
extended to the trailer if you own the trailer. However,
Physical Damage (comprehensive or collision) must be
purchased separately. You will need to review your
policy for exceptions.
What coverage is provided by my policy if I buy
a vehicle to replace an existing vehicle on the policy
during the policy term?
If you replace your previously covered vehicle with a
private passenger auto, pickup or van, it will normally
have the same coverage as the vehicle it replaced. In
most cases, you will need to notify the insurer or its
agent or producer within 30 days or less of purchasing
the different vehicle. You will need to review your
policy to determine what notice requirements apply.
Is there any coverage provided if I buy an
additional vehicle during the policy term?
Most policies extend the coverage for an auto you
already have on your policy to an additional vehicle.
Will my minimum limit Arizona policy protect me
if I drive to another state that requires higher minimum
liability limits?
In most case, your Arizona policy limits will be
interpreted to provide at least the minimum limits
required by the laws of the state in which you are
operating your vehicle. You should review your policy to
make certain this is the case
Will my personal auto policy provide coverage if
I use my vehicle for business purposes?
Some insurers may provide coverage for business use
vehicles depending upon the type of vehicle and its
particular use in business, but you may need to purchase
a commercial auto policy to receive the coverage you
need. You should consult with an insurer or insurance
agent or producer to determine the proper policy needed.
Will my personal auto policy provide coverage if
I use my vehicle as a car pool vehicle?
If you are in a share-the-expense car pool, your policy
will provide the same protection as if you did not use
your vehicle in a car pool.
If I go on vacation and rent a vehicle, will my
Arizona auto policy provide coverage while I am driving
the rental vehicle or must I purchase coverage from the
rental company?
If you vacation within the United States (and in most
cases Canada), for liability coverage, the policy
carried by the rental company will be primary (pay
first), and your policy will be excess (pay second) if
the rental company's limits are not enough to pay for
the injuries or property damages you cause. For physical
damage to the rental vehicle, some companies insurance
allow the broadest coverage's you have under your
comprehensive and collisions coverage's to apply to the
rental vehicle, subject to the deductible stated in your
policy. Before renting the vehicle, you should check
with your insurer or insurance agent or producer to
determine if your coverage applies to the rental
vehicle.
Will my Arizona personal auto policy provide
coverage if I drive my vehicle into Canada?
Most Arizona personal auto policies will provide
coverage for driving in Canada, but you should review
your policy or contact your insurer or insurance agent
or producer before driving into Canada to determine if
your coverage applies in Canada.
Will my Arizona personal auto policy provide
coverage if I drive my vehicle into Mexico?
Mexican law requires that you purchase separate
liability coverage from a Mexican insurer before
operating your vehicle in Mexico. Your Arizona personal
auto policy may provide some limited coverage on a
limited basis (within 25-50 miles of the Mexican
border), but this coverage does not meet the insurance
requirements of the Republic of Mexico. Failure to
purchase proper Mexican liability insurance may result
in many hours in a Mexican jail or a heavy fine if you
are involved in an accident while operating your vehicle
in Mexico.
Physical Damage
Coverage's
What is covered under Comprehensive coverage?
Some of the coverage's provided under Comprehensive
include theft of all or part of the vehicle, glass
breakage, and damage due to fire, windstorm, hail,
water, falling objects, vandalism, explosion, or hitting
a bird or animal.
What is covered under Collision coverage?
Collision coverage pays if your auto collides with an
object, including another car, or if it overturns. Your
insurer will pay to repair these damage even if the
collision is your fault.
I have an older vehicle which I do not care to
insure for comprehensive and collisions coverage's. Is
there any reason why I should carry higher than minimum
liability limits?
If you have assets you need to protect, you may want to
carry higher than minimum liability limits to protect
yourself from lawsuits by a person or persons you may
injure in an accident.
How is the deductible for Comprehensive or
Collision coverage applied?
The deductible for Comprehensive or Collision applies to
each loss that occurs to your vehicle. A deductible is
the dollar amount you will have to pay toward the loss
before the insurer begins to make payments on the loss.
To whom do I pay the deductible if I have a
Comprehensive or Collision loss?
You will pay the deductible to the repair facility.
Medical Payments Coverage
What is covered under Medical Payments
coverage and to whom does the coverage apply?
You will need to read your policy for a complete
description of the coverage provided. Basically, Medical
Payments coverage provides coverage for necessary and
reasonable medical and funeral expenses incurred as the
result of an automobile accident up to the limit stated
in the policy for you or passengers in your vehicle.
If I already have health insurance, do I need to
carry Medical Payments insurance on my auto policy?
Even though you have major medical insurance, you may
still wish to carry some medical payments insurance to
cover deductibles and co-payments which are not covered
by your health insurance plan.
Uninsured and
Underinsured Motorist Coverage's
What is the difference between Uninsured and
Underinsured Motorist coverage's?
Uninsured Motorist coverage protects you or passengers
in your vehicle for bodily injury you or your passengers
sustain in an accident involving a driver who has no
liability coverage. Underinsured Motorist coverage
protects you or passengers in your vehicle for bodily
injury you or your passengers sustain in an accident
involving a driver who has insufficient insurance to
cover the injuries of you or your passengers.
If everyone in Arizona is required to purchase
liability coverage, why do I need Uninsured Motorist
coverage?
Even though the law requires all motorists in Arizona to
carry liability insurance, not all Arizona motorists
have liability coverage in force. Also, motorists may
come into Arizona from other states or countries and not
have liability coverage on their vehicles.
Miscellaneous Coverage's
What does Rental Reimbursement coverage
provide, and does it provide coverage if I take my
vehicle to a shop for mechanical repairs?
Rental Reimbursement coverage provides a specified
amount for you to rent a vehicle while your covered auto
is being repaired or replaced after it has been damaged
because of a loss covered under Comprehensive or
Collision. It does not provide coverage for mechanical
repairs that result from mechanical breakdown that are
not related to a comprehensive or collision loss.
What coverage does full glass or safety
equipment coverage provide?
This coverage provides full repair or replacement of all
glass used in the windshield, windows, and doors, and
all glass, plastic or other materials used in the lights
of a motor vehicle without regard to any deductible.
Borrowed or Rented
Vehicles
If I borrow a car from a friend or relative
for a short time while my vehicle is being repaired,
will my policy cover me while I am driving the borrowed
car?
The policy covering the vehicle would be primary and in
most cases, your policy would cover the vehicle on an
excess basis. If no policy covers the borrowed car, most
companies will treat your policy as the primary coverage
for the borrowed car.
What do you mean by primary and excess basis?
Primary means that policy will provide coverage first,
and excess means that policy will provide coverage after
the limits of the primary policy have been exhausted.
If I rent a truck to move my personal property,
will my personal auto policy provide any coverage for
the rental truck?
No. Most personal auto policies do not provide any
coverage for the rental truck.
Accidents, Thefts or
Other Losses
If my vehicle was damaged in
an accident that was not my fault, how can I recover my
deductible?
If the negligent individual carried liability coverage,
you can recover your deductible from the negligent
driver's insurer.
My vehicle was stolen along with some personal
items which were in the vehicle at the time. Does my
auto policy provide any coverage for the personal items?
Most policies do not provide coverage for personal items
left in a vehicle.
What should I do if I have an accident?
You should discuss with your insurer or insurance agent
or producer what steps they recommend. Further, you may
wish to refer to your insurance identification card, as
the steps you need to follow may be listed on the card.
Generally you should first notify the police. Then write
down the names, addresses, telephone numbers and license
numbers of persons involved and of witnesses. Also write
down the license plate number and state of each vehicle
involved. Do not admit fault, and do not discuss the
accident with anyone except your insurer representative
or insurance agent or producer, or the police. Notify
your insurance agent or producer promptly. Cooperate and
answer all questions fully. Take notes whenever you talk
with insurer employees, your insurance agent or
producer, lawyers, police or others about the accident.
Write down the date, times, names and subjects you
talked about and include all decisions or promises made.
Save your receipts for such items as car rental or a
hotel room if the accident happens out of town, and save
copies of all documents you send or receive.
What should I be aware of when getting my
vehicle repaired after an accident?
Your insurer may not require you to travel unreasonably
to inspect a replacement auto, to obtain a repair
estimate or to have the vehicle repaired at a specific
repair shop. If you choose to have the repairs done at a
facility which charges more than several other
independent shops, any amount in excess of the
settlement provided by the insurer will be your
responsibility.
I recently totaled my vehicle in an accident. In
addition to the Collision coverage afforded under my own
policy, what additional settlement options apply?
On first party total loss situations, the insurer may
elect to offer either a replacement vehicle, which is a
specific comparable vehicle available to you, or a cash
settlement to purchase a comparable vehicle. The
settlement offer must include all applicable taxes,
license fees and other fees which apply to transfer of
evidence of ownership of the vehicle, at no cost other
than any deductible provided in the policy.
Cancellation or Nonrenewal
What are the reasons for which my policy can
be canceled?
- After your policy has been in force for 60 days,
Arizona law permits the policy to be canceled for
the following reasons:
- Non-payment of premium.
- The insurance was obtained through fraudulent
misrepresentation.
- You or anyone who customarily operates your
vehicle has:
Has had his or her driver's license suspended or
revoked during the policy period.
- Becomes permanently disabled and does not
produce a certificate from a physician testifying to
such person's ability to operate a motor vehicle.
- Is or has been convicted during the thirty-six
months immediately preceding the effective date of
the policy or during the policy period of:
1. Criminal
negligence, resulting in death, homicide or assault,
arising out of the operation of a motor vehicle.
2. Operating a motor vehicle in an
intoxicated condition or while under the influence of
drugs.
3. Leaving the scene of an accident.
4. Making false statements in an
application for a driver's license.
5. Reckless driving.
4. The insurer is placed in
rehabilitation or receivership.
5. The insured vehicle which is
rated as a private passenger auto is used regularly and
frequently for commercial purposes.
For what reasons can my policy be non-renewed?
In addition to the reasons listed
above Arizona law also permits your policy to be
non-renewed if you or someone
who customarily operates your vehicle has had during the
thirty-six months immediately before the notice of
nonrenewal three or more at-fault accidents (at least
fifty per cent at fault) in which the property damage
paid by the insurer for each accident which occurred
prior to January 1, 2000, is more than $1,800. For
accidents occurring after January 1, 2000, the Arizona
Department of Insurance annually adjusts and publishes
the threshold amount of property damages. The three
accidents must have occurred after July 19, 1996, and
the policy may not be non-renewed
unless the same person has had all of the accidents that
make the policy subject to nonrenewal or if you have
been insured for standard automobile bodily injury
coverage for at least ten consecutive years with the
same insurer.
What can I do if I have been declined for
insurance coverage, or my policy has been canceled or
non-renewed
and I feel that the declination, cancellation or
nonrenewal was unfair or in violation of the law?
Within ten days of your receipt of the cancellation or
nonrenewal notice, you may write to the Director of
Insurance, State of Arizona, Department of Insurance,
2910 North 44th Street, Suite 210, Phoenix, Arizona
85018, stating your objection to the insurer's action.
What can I do if I have a complaint in general
regarding my auto insurance?
You should first attempt to resolve your concerns with
your insurance agent or producer or insurer. However, if
you believe you have been treated unfairly, have
received poor service, or have some other complaints
against your insurer or its agent or producer, you
should state the facts, in writing, to the Consumer
Services Division, Arizona Department of Insurance, 2910
N. 44th St., Phoenix, Arizona 85018-7256 or by calling
the Department in Phoenix at (602) 912-8444, Tucson at
(520) 628-6370 or statewide at 1-800-325-2548.
Your written complaint should include the following
information: your name, address and telephone number;
the name of the insurer or insurance agent or producer
about which you are complaining; the policy number and
the type of insurance and a description of the problem.
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