Arizona Auto Insurance
What coverages should you carry on your Arizona auto insurance policy? Your car insurance policy is broken down into several components. The first part is called "Liability". This part protects the other person for injuries or damages you cause. "Full" coverage has two main parts. Comprehensive pays to fix your vehicle in event it is stolen, vandalized or damaged in any claim where your vehicle is not moving. Collision helps ensure your vehicle will be fixed if damaged while moving. You also have towing, glass, and car rental to consider.
The same goes for property damage, which pays for the "other" vehicle to be fixed or replaced that you are liable for in an at-fault accident. The minimum coverage is $10,000. If you hit an expensive vehicle or are responsible for a multi-vehicle accident, you will need substantially more than the state minimum coverage, especially if you hit a high value auto.
Some optional coverages include: Uninsured Motorist (UM), Underinsured Motorist (UIM), and Medical Coverage. UM & UIM pay to you or your passengers for injuries if the other driver has no insurance or is underinsured. Medical covers injuries to passengers in your car, whether you are driving or the other person is at fault but has no insurance. Consider carrying Full Glass in Arizona.
Some common questions
Q: Am I covered if I drive a rental vehicle? A: Yes, as long as you
have full coverage on your personal vehicle. Your auto policy acts
toward a rental vehicle just like it does for your own vehicle.
Q: My car is older, shouldn't my premium decrease? A: Keep in mind
that most claims are not total losses. Most claims involve the fixing
up of a damaged vehicle, which means the insurance company has to pay
for new parts and labor. Parts and labor costs continue to increase. In
addition, there are other parts of your policy that make up your
premium and have nothing to do with your vehicle (bodily injury,
property damage, medical, uninsured & under-insured motorist, glass,
road service and car rental).
Q: If I buy a car and my agent is unavailable, am I covered? A: If
you have full coverage on your existing vehicle, coverage will extend
to a newly purchase vehicle for a short duration, usually 30 days.
Q: What should I do if I sell my vehicle? A: We would recommend
accompanying the buyer to DMV and making sure they transfer title to
themselves. Failure to do so could result in you continuing to be
responsible for the vehicle or accidents that vehicle is involved in,
even though you no longer retain possession. Or, you can go onto the
DMV website and notify them that the vehicle has been sold.
Q: What if my vehicle is inoperable? A: As long as you maintain an
active registration you must carry insurance on a vehicle. Your agent
can probably remove some coverage and lessen your premium in a case
like this. It might be advisable to keep comprehensive on the vehicle,
which covers it for theft and vandalism. Or, you can go to DMV and
de-register a vehicle. That would allow you to cancel your insurance on
it completely.
Q: What is an SR22? A: It is a mandatory certificate of insurance
required by DMV, and reserved for driver's who drive uninsured, receive
a DUI or some other serious driving offense. Auto premiums increase
dramatically with an SR22. If you need an SR22 you must maintain
continuous insurance for 3 years before it can be taken off. A common
mistake made is people who have a vehicle that is inoperable that
cancel their auto insurance. The DMV does not know your vehicle is
inoperable. They simply assume you are driving without insurance.
Bingo, they hit you with an SR22 and your rates skyrocket. The easy
road is to go to DMV and de-register the auto.
Q: What determines my auto insurance premium? A: Your driving
record, type of car, zip code, amount of coverage and even age. Maybe
even more important now is something called an "insurance credit
score". This is not exactly the same as your fico score or credit score
used to determine your ability to qualify for a home or auto loan. It
is similar, but insurance companies have their own formula for
determining a person's score.
Q: What is an Insurance Credit Score? A: An insurance credit score
is a little different than other credit scores, such as those used to
qualify for a home loan or car loan. But it is very similar. Insurance
companies have different factors and each company may use more factors
or less than a competing company. Third party studies have shown pretty
convincingly that a person with a better insurance credit score has
fewer claims, which makes them more profitable for the insurer. The
reasoning is that a person who works diligently to have good credit is
more likely to be more responsible behind the wheel of a car than a
person with less favorable credit. It is a highly sensitive issue with
some insured's but as long as the State Legislature and the Insurance
Commissioner continues to allow the use, insurance companies will use
insurance credit scores.
Q: I have a teen driver. Any advice? A: Wow, that is a great
question. I have had one teen driver myself (so far) and the key is
practice, practice, practice. Do not rely solely upon your teen's school
driving class. Every parent needs to tutor their own child over a long
period of time. Teen accidents are out of sight. Do not be in a rush to
allow your teen to drive alone. Monitor their passengers and who is
allowed to ride with your teen driver. Advise them to not tail gate
other vehicles. Advise them to not speed. Require them and their
passengers to wear seat belts or refuse to allow them behind the wheel.
Teen accident and fatalities statistics are staggering. It is not a
responsibility to be taken lightly. My advice to all parents with a
teen driver? Be tough. You will sleep better and they will live
longer.
