Arizona Car Insurance Laws

Like most states, Arizona requires that every motor vehicle on the road be covered by a car insurance policy that meets certain minimum requirements, in case the vehicle is involved in a traffic accident. In this article, we'll discuss:

• Arizona law as it relates to insurance and financial responsibility for car accidents and car insurance for registered vehicles
• how Arizona's car insurance laws work in the context of an insurance claim or lawsuit after the crash, and
• the minimum requirements for liability car insurance coverage under Arizona's mandatory liability insurance laws.

Arizona Is a "Fault" Car Accident State

Arizona follows a traditional "fault"-based system when it comes to financial responsibility for losses stemming from a car accident: injuries, lost income, vehicle damage, and so on. This means that the person who was at fault for causing the car accident is also responsible for any resulting harm (from a practical standpoint, the at-fault driver's insurance carrier will absorb these losses, up to policy limits).

A person who suffers any kind of injury or damage due to an auto accident in Arizona usually can proceed in one of three ways:

• by filing a claim with his or her own insurance company, assuming that the loss is covered under the policy (in this situation, the injured person's insurance company will likely turn around and pursue a subrogation claim against the at-fault driver's carrier)
• by filing a third-party claim directly with the at-fault driver's insurance carrier, or
• by filing a personal injury lawsuit in civil court against the at-fault driver.

Note: In a no-fault car insurance state, a claimant doesn't usually have this same range of options. After a car accident in a no-fault state, you must turn to the personal injury protection coverage of your own car insurance policy for payment of medical bills and other out-of-pocket losses, regardless of who caused the crash. Only if your injuries reach a certain threshold can you step outside of no-fault and make a claim directly against the at-fault driver. But Arizona drivers don't need to worry about no-fault for an in-state accident.

The Arizona Mandatory Liability Insurance Law

Arizona requires that each motor vehicle in operation on the state's roads be covered by liability insurance through a company authorized to do business in the state. That includes not just cars and trucks, but also golf carts, motorcycles and mopeds. The required minimum amounts of liability car insurance coverage in Arizona are:

• $25,000 for bodily injury to or death of one person in an accident caused by the driver of the insured vehicle
• $50,000 for bodily injury to or death of two or more people in an accident caused by the driver of the insured vehicle, and
• $15,000 for property damage per accident caused by the driver of the insured vehicle.

This basic coverage pays the medical bills, property damage bills, and other costs of drivers, passengers, and pedestrians who are injured or have their vehicle damaged in a car accident you cause, up to coverage limits. You can (and in some situations should) carry more coverage to protect you in case a serious crash results in significant car accident injuries and vehicle damage. Remember, once policy limits are exhausted, you are personally on the financial hook, so higher insurance limits can help protect your personal assets in the event of a serious crash.

Your liability coverage will kick in if any family member is driving your vehicle, or if you've given someone else permission to use it. It will likely also cover you if you get into an accident in a rental car.

Finally, remember that the liability coverage we discussed here doesn't apply to your own injuries or vehicle damage after an Arizona car accident. You'll need different (additional) coverage for that if you're involved in a car accident and no one else's coverage applies to your losses. For example, personal injury protection (PIP) or MedPay coverage can be used to pay your car accident medical bills (this coverage is optional in Arizona), and collision coverage (also optional in Arizona) can pay for repairs to (or replacement of) your damaged vehicle after a car accident.

Penalties for Driving Without Mandatory Car Insurance in Arizona

If you're asked for proof of insurance during a traffic stop or after a car accident in Arizona, and a law enforcement officer learns that you don't have insurance, you'll almost certainly face suspension of your vehicle's registration and/or your driver's license. And in order to get these privileges reinstated, you'll need to pay fees and file proof of financial responsibility with the Arizona Motor Vehicle Department. Of course, these penalties will likely pale in comparison to the financial hit you could take if you're in a car accident and you don't have car insurance.

For more details on Arizona's car insurance rules, straight from the state, check out the Arizona Department of Transportation's frequently-asked questions on mandatory car insurance.