Understanding Auto Insurance: How Does it Work?

Understanding Auto Insurance: How Does it Work?

Like most states, all drivers in Arizona are required to carry proof of financial responsibility in order to legally drive on the state’s roads. In most cases, this involves purchasing an auto insurance policy. Auto insurance is essentially an arrangement in which a company or government agency guarantees to provide compensation for specified auto-related losses or damages in exchange for the payment of a monthly premium.

When considering the many different types auto insurance coverage, as well as the increased convenience of quickly purchasing insurance online, it can be difficult to fully understand what exactly you are getting when you sign up for a policy. To help clear up some of the confusion, our firm has put together a brief guide regarding auto insurance Arizona and the types of coverage available to you.

Basic Liability Coverage

Arizona has a traditional “fault” insurance structure, meaning that drivers in Arizona are financially responsible for any damages that they should cause in the event of a car accident. All Arizona drivers must carry at least the following minimum amounts of liability coverage:

  1. $15,000 per person for bodily injury liability
  2. $30,000 per accident when more than one person is injured
  3. $10,000 for property damage

These amounts cover damages to other people and are paid in the event that you are deemed to be at fault for a collision. If you cause damages which exceed these limits, the injured parties may file a civil claim against you in pursuit of additional compensation. Since these basic limits can be used up quickly in the event of a serious collision, many drivers choose to protect themselves from liability by purchasing additional coverage.

Uninsured/Underinsured Motorist Coverage

Unfortunately, some people ignore the state’s auto insurance requirements and choose to drive without coverage. For this reason, all auto insurance companies must give policyholders the option to add uninsured/underinsured motorist coverage (UIM) to their policy. In the event that you should be hit by a driver without insurance or if your injuries exceed the limits of their policy, your own insurance company will step in and pay the remainder of your losses up to the limits of your UIM coverage. Since adding UIM coverage often amounts to little more than a few dollars a month, many states actually include UIM as part of the minimum required auto insurance due to its benefits.

Collision Coverage

Since UIM coverage only covers losses related to injuries, many choose to also add collision coverage to their policies. This will kick in to pay for damage to your vehicle in the event that you should be found responsible for the accident. This can be especially useful in scenarios where fault for a collision is contested, as your collision coverage will pay for repairs for your car in the meantime while the involved insurance companies perform their investigations.

Comprehensive Coverage

Comprehensive car insurance, also referred to as OTC or Comp insurance, covers damage to your vehicle that should occur from vandalism, theft, and damage from natural disasters. Comp coverage essentially covers all physical damage to your car that would ordinarily not be covered under your collision coverage (such as hitting a large animal). It is important to note, however, that comp coverage does not cover everything. Only automobile damages from non-collision accidents will be covered, with stolen personal items such as car radios or wallets being excluded.

Need Auto Insurance? Do Your Homework

The last thing you need in the event of a collision is to learn that you are not covered. For this reason, whether you choose to purchase a policy online or with the assistance of a broker, it is imperative you thoroughly read your policy to understand exactly what you are getting and where you may still be liable.

For more information about the types of auto insurance available, or for assistance filing a claim in the event if a crash, contact Browne Law Group today. Having handled complex accident claims for clients throughout Arizona, our Gilbert car accident attorney can provide the strong advocacy you need to protect your rights and maximize your compensation.

Call (480) 428-1717 or contact our office online today to discuss your situation in detail.