What Arizona Drivers Should Know About Underinsured Motorist Coverage

Motorists are required to carry auto liability insurance that meets the minimum coverage limits established by Arizona Revised Statutes 28-4009. Conversely, the state’s minimum coverage limits may not be sufficient to cover the costs of a serious wreck. Understanding the limits of the at-fault driver’s policy and the protection available through your own underinsured motorist coverage may make a significant difference after an accident.

Understanding how underinsured motorist coverage works in Arizona and what your policy may cover can help you make informed decisions after a crash.

What Are the State Minimum Car Insurance Requirements for Arizona Drivers?

As set forth in Arizona Revised Statutes 28-4009, motorists must carry minimum automobile liability insurance with the following limits:

• $25,000: Maximum coverage available for injury or fatality sustained by a single person in a crash
• $50,000: Maximum combined coverage for injury or fatalities involving multiple claimants in the same accident
• $15,000: Maximum coverage available for property damage resulting from a single car wreck

While these limits satisfy Arizona’s minimum insurance requirements for private passenger vehicles, they may not be enough to cover economic and non-economic damages.

What is Underinsured Motorist Coverage?

Underinsured motorist (UIM) coverage is a type of car insurance that can help protect a driver and their passengers if they sustain injuries in a crash caused by a motorist who does not have sufficient liability insurance to cover accident-related damages. While Arizona requires motorists to carry auto liability insurance, the minimum coverage limits often fall short when a car wreck results in serious injuries and significant losses.

The purpose of UIM coverage is to address the difference between the compensation available through the negligent driver’s insurance and damages incurred. It can prove especially important when an accident causes traumatic injuries that require ongoing treatment and diminished earning potential. Reviewing your auto insurance policy before a crash occurs can help you understand whether you have this coverage and what limits apply.

Review Your Auto Insurance Policy Before an Accident Happens

The best time to review your auto insurance policy is before you are involved in a motor vehicle crash. Taking a few minutes out of your day to check your policy can help you determine whether you carry underinsured motorist coverage and whether your coverage limits provide sufficient protection if another vehicle operator causes a serious traffic collision. This is particularly important when multiple vehicles and claimants are injured in an accident.  

The first step is to review the declarations page for your auto policy, which provides a summary of your vehicle coverage types and limits. Check whether underinsured motorist coverage is listed and how much protection your policy provides. The declarations page serves as the final proof of the primary insured’s decision to add or waive UIM coverage, as outlined in Arizona Revised Statutes 20-259.01(B).

If you previously declined UIM coverage, contact your insurer to discuss whether you can add it to your policy. It may be best to speak with an insurance agent to understand how UIM benefits apply to you and other individuals covered under your policy. Do not wait until an accident happens to find out you don’t have adequate coverage. Review your declarations page to reduce the risk of unexpected financial challenges later.

Is Underinsured Motorist Coverage Required in Arizona?

Drivers in Arizona are not required to purchase UIM coverage. However, state law requires insurance companies to make UIM coverage available and provide a written offer to the policyholder. Insurers are required to offer UIM coverage extending protection to all individuals insured under an automobile insurance policy, as set forth in Arizona Revised Statutes 20-259.01(B). Underinsured motorist coverage is required to be offered in limits than the policy's bodily injury limits.

Arizona law establishes a minimum amount of UIM coverage that may be purchased. For policies subject to the current minimum vehicle liability limits, the minimum UIM limits are $25,000 for a single person injured in an accident and $50,000 for multiple claimants in one collision. If you purchase UIM coverage, it can protect you and other individuals listed under your policy when a car wreck is caused by a negligent party whose available liability insurance is not sufficient to cover the total damages.

What is a UIM Rejection Waiver?

A UIM rejection waiver is a document or recorded coverage selection that indicates a policyholder has declined underinsured motorist protection. Insurers commonly use coverage selection forms to document whether an applicant accepts or declines available UM/UIM coverage. The form is used to establish that the insurance carrier made the required offer and that the policyholder chose not to purchase the additional coverage.  

Under Arizona law, the written offer must be made by the insurance company using a form subject to approval by the Arizona Department of Insurance and Financial Institutions. The insurer is required to send the policy's declarations page to the policyholder. This serves as the final documentation of the primary insured’s decision to equip or decline UIM coverage in writing.

It is important to note that a UIM rejection does not necessarily require a separate, signed waiver in every situation. Arizona courts have addressed this issue and have clarified that the law does not expressly impose a universal signature requirement for declining UIM coverage. Rejecting underinsured motorist coverage may have significant financial consequences after a serious crash caused by a negligent party with insufficient bodily injury liability limits.

What Happens if UIM Coverage is Rejected?

If a policyholder declines UIM coverage, they generally cannot seek UIM benefits under that auto insurance policy when an at-fault motorist's bodily injury liability limits prove insufficient and leave accident-related damages unpaid. This may leave the injured party personally responsible for expenses that exceed the negligent driver’s available auto insurance coverage for bodily injury.

For instance, an individual that suffers injuries in a car accident in Arizona accumulates $100,000 in medical expenses and other damages. The responsible motorist only carries the state minimum liability limits of $25,000 for bodily injury per person. If the injured party carries UIM coverage, they may have an additional source of protection for the difference, subject to the UIM limits and policy provisions.

Contact an Arizona Car Accident Lawyer Today

At Southwest Injury Law, we understand the financial, emotional, and personal challenges that often follow a serious collision. Our experienced legal team is committed to helping injured parties and their families understand their options and seek the compensation available to them. If you were injured in a collision caused by an underinsured driver, discuss your case with an Arizona auto accident attorney at (602) 777-3300.