The new year brings a fresh opportunity to review your auto insurance coverages to ensure they are ample.

Liability insurance protects us from financial exposure when we’re liable for causing injuries to others when driving a motor vehicle (or anybody else driving our vehicle with our permission). As of July, 2020, the state minimum is now $25,000/$50,000/$15,000.

What do these numbers mean?  The first figure is the most your insurance company will pay to any one person injured by your negligence; the second figure represents the most your insurance company will pay for all injury claims, regardless of the number of people injured, and the last figure is the most your insurance company will pay for all property damage caused by your negligence.  There is no such thing as “full coverage!” It’s foolish to carry minimum liability limits, especially if you’re employed or have the ability to earn a good livelihood in the future (college students, young entrepreneurs) or own your own home.  Many auto insurers will offer liability insurance for bodily injuries in coverage amounts of $100,000/$300,000, $250,000/$500,000, and upwards to coverage limits in multiples of millions of dollars. What limits should you purchase?  This is a decision ideally made after conferring with a knowledgeable insurance producer/agent.

Uninsured motorist coverage:  In Arizona, nearly one in eight motorists are uninsured.  This valuable coverage pays you for the full value of your personal injury damages (past and future medical expenses, loss of earnings, impairment to earning capacity, pain-and-suffering damages) caused by an uninsured motorist.  The coverage also applies if the other driver is unidentified (a hit-and-run motorist). This is a portable coverage, so it travels with you, so you and all family members residing with you will typically have coverage when driving or occupying your own vehicle, another vehicle, riding a bicycle, walking as a pedestrian… you get the idea. Best of all, your insurance company is prohibited from increasing your premium if you use this or any other automobile insurance coverage, provided you did not cause the collision.

Underinsured motorist coverage:  Similar to uninsured motorist coverage, except that it applies when the responsible motorist’s liability insurance is insufficient to compensate you for your personal injury damages. Again, this is a portable coverage, it provides coverage for you and family members, as well as occupants of your vehicle, and will compensate you for your full personal injury damages to the extent they are greater than the responsible motorist’s liability insurance coverage. Just as with uninsured motorist coverage, your insurance company cannot increase your premium if you use this coverage, provided you did not cause the collision.

Your insurance company is required by law to offer uninsured and underinsured motorist coverages in limits up to your liability insurance coverage. Why would you purchase  significant amounts of liability insurance, which pays money to other people for your negligence, but not protect yourself and family members injured when somebody else was at fault, and that person either had no insurance, was not identified, or had insufficient insurance?

And the best part:  Typically uninsured and underinsured motorist coverages cost a fraction of the premium you would otherwise pay for the same amount of liability insurance.

So break out those automobile insurance declarations pages, and make certain you have ample amounts of liability, uninsured and underinsured motorist coverages. Better to have it and not need it, than to need it and… Well, you know.