Understanding Uninsured Motorist Claims in Arizona

Arizona’s Mandatory Insurance Laws and the Uninsured Motorist Problem

Arizona operates under a “fault” car insurance system, meaning the driver who causes an accident is financially responsible for the resulting damages. To ensure drivers can meet this responsibility, state law mandates all registered vehicle owners carry minimum liability insurance: $25,000 for bodily injury or death per person, $50,000 for bodily injury or death per accident, and $15,000 for property damage. Despite this legal requirement, a significant portion of Arizona motorists drive without any insurance or with insufficient coverage. The Insurance Research Council (IRC) estimates that approximately 11% of Arizona drivers are uninsured. This creates a substantial financial risk for responsible, insured drivers who may be involved in a collision caused by one of these uninsured or underinsured motorists.

What Exactly is Uninsured (UM) and Underinsured (UIM) Motorist Coverage?

Uninsured Motorist (UM) coverage is a crucial component of your auto insurance policy designed to protect you, your passengers, and sometimes your vehicle, when the at-fault driver has no bodily injury liability insurance whatsoever. This coverage can also apply in hit-and-run incidents where the at-fault driver cannot be identified. Underinsured Motorist (UIM) coverage comes into play when the at-fault driver has insurance, but their policy limits are too low to cover the full extent of your damages. For example, if you sustain $75,000 in medical bills and the at-fault driver only has the state minimum $25,000 per person limit, your UIM coverage would help bridge the $50,000 gap, up to the limits you purchased.

In Arizona, UM and UIM coverage are offered as two distinct, separate coverages. It is vital to understand that UM/UIM coverage is not automatically included in your policy. Arizona law requires insurance companies to offer these coverages to you at the time of policy issuance or renewal. However, you have the right to reject them in writing. This rejection must be a knowing and intelligent waiver. It is highly advisable to carefully consider the significant financial protection these affordable coverages provide before opting to reject them.

The Critical Steps to Filing a UM/UIM Claim in Arizona

The process of filing an uninsured or underinsured motorist claim is intricate and requires meticulous attention to detail. Following these steps can protect your rights and strengthen your claim.

1. Immediate Actions at the Scene: Your first priority is safety. Check for injuries and call 911 for medical assistance and law enforcement. A police report is an invaluable piece of evidence, especially in hit-and-run or uninsured driver scenarios. Collect as much information as possible: the other driver’s name, address, and license plate number. Take photographs of the vehicles, their positions, license plates, visible damage, and the surrounding scene, including traffic signs and road conditions. Obtain contact information from any witnesses. If the other driver is uncooperative or flees, note as many details as you can for the police.

2. Notifying the Relevant Insurance Companies: You must promptly report the accident to your own insurance company, even though the other party was at fault. Failure to report in a timely manner could jeopardize your claim. Provide them with the basic facts. You will also need to inform the at-fault driver’s insurance company if they have one, though their insurer will likely deny coverage if the driver was uninsured. Your insurer will open a claim file.

3. The Role of the Police Report: The official police report serves as an independent account of the incident. It will typically note the officer’s determination of fault, which is critical. It may also include statements from the drivers and witnesses, a diagram of the accident, and whether any citations were issued. This document is a foundational element of your UM/UIM claim.

4. Seeking Medical Attention: Even if you feel fine immediately after the crash, seek a medical evaluation. Adrenaline can mask pain and symptoms of serious injuries like whiplash, concussions, or soft tissue damage may not appear for hours or days. A medical professional creates a documented link between the accident and your injuries. Follow all treatment plans and attend all follow-up appointments. Gaps in treatment can be used by the insurance company to argue your injuries were not severe.

5. Documenting Everything: Maintain a detailed file. Keep all medical bills, receipts for prescriptions, medical devices, and travel expenses for medical visits. If your injuries prevent you from working, secure documentation from your employer and doctor regarding lost wages. Start a journal to document your physical pain, emotional distress, and how the injuries impact your daily life and activities. This personal account can be powerful evidence of non-economic damages like pain and suffering.

How UM/UIM Coverage Interacts with Other Policies and Sources of Recovery

Arizona UM/UIM policies often contain specific provisions governing how they interact with other insurance.

• Stacking: Arizona law permits “stacking” of UM/UIM coverage. This means if you have multiple vehicles on your policy, you may be able to combine (stack) the coverage limits for each vehicle to increase the total amount available for a single claim. For instance, if you have two cars with $50,000/$100,000 UM/UIM limits, stacking could provide you with $100,000/$200,000 in available coverage. You must proactively select and pay for this option when you purchase your policy. Anti-stacking clauses are also permitted, so you must review your policy language carefully.

• Set-Offs and Reducing Clauses: Your insurance policy will include provisions that allow it to reduce its payout by amounts received from other sources. This is known as a “set-off” or “reducing clause.” For example, if you receive the $25,000 limit from the at-fault driver’s policy, that amount will typically be deducted from the total UIM coverage available under your own policy. The goal is to make you whole, not to provide a double recovery.

• Health Insurance and MedPay: Your medical payments coverage (MedPay) or health insurance will likely cover your initial medical bills. However, your UM/UIM insurer may have a right to be reimbursed for these payments from your final settlement if those same medical expenses are included in your UM/UIM claim. This process is called subrogation. An experienced attorney can often negotiate these liens to maximize your net recovery.

Common Challenges and Disputes in Arizona UM/UIM Claims

Filing a claim with your own insurer can be surprisingly adversarial. Insurance companies are for-profit businesses, and paying out UM/UIM claims directly affects their bottom line. Be prepared for potential disputes.

• Disputes over Fault: Your insurer has a legal duty to investigate the claim and may dispute that the other driver was uninsured or entirely at fault. They might argue you shared some comparative fault for the accident, which under Arizona’s pure comparative negligence rule, would reduce your recovery proportionally.

• Disputes over Injury Value and Causation: This is the most common area of conflict. The insurer may argue your medical treatment was excessive, unnecessary, or unrelated to the accident. They might hire independent medical examiners (IMEs) to challenge your doctor’s opinions. They will meticulously scrutinize your medical records and personal history for any pre-existing conditions they can blame for your current pain.

• Low Settlement Offers and Bad Faith: The adjuster’s initial settlement offer is often a lowball figure designed to test your knowledge and resolve. It may not fully account for future medical needs, ongoing pain, or lost earning capacity. If an insurance company unreasonably denies or undervalues a valid claim, delays payment without cause, or fails to properly investigate, they may be acting in “bad faith.” Bad faith insurance practices are illegal in Arizona and can give rise to a separate lawsuit against the insurer for damages that exceed the policy limits, plus potential punitive damages.

The Arizona Legal Process: When a Lawsuit Becomes Necessary

If negotiations with your insurance company reach an impasse, filing a lawsuit may be the only way to obtain fair compensation.

• The Demand Package: Before suing, your attorney will typically send a comprehensive demand package to the insurer. This package includes all evidence: the police report, medical records and bills, expert reports, witness statements, documentation of lost wages, and a detailed settlement demand letter arguing for a specific value. This gives the insurer one final chance to settle the claim.

• Filing the Lawsuit and the Role of Arbitration: Many Arizona auto insurance policies contain arbitration clauses for UM/UIM claims. This means that instead of a jury trial, your dispute may be heard by a neutral third-party arbitrator or a panel of arbitrators whose decision is usually binding. Arbitration can be faster and less formal than court litigation, but it also has limitations, such as restricted discovery and limited appeal rights. If your policy does not mandate arbitration, or if you and the insurer agree to waive it, you would file a lawsuit in civil court.

• The Statute of Limitations: Arizona has a strict deadline for filing personal injury lawsuits, known as the statute of limitations. For most auto accident injury claims, including UM/UIM claims, you have two years from the date of the accident to file a lawsuit. Missing this deadline almost always results in your case being permanently barred. This deadline applies even if you are in ongoing negotiations with the insurance company.

Why Legal Representation is Highly Advisable

Navigating a UM/UIM claim is a complex legal process that involves dealing with sophisticated insurance adjusters and lawyers working for your own insurance company. An experienced Arizona personal injury attorney understands the tactics insurers use to minimize payouts. They can handle all communications, ensure proper evidence is gathered and preserved, hire necessary experts (such as accident reconstructionists or medical specialists), and accurately value your claim to include all past, present, and future damages. Most attorneys work on a contingency fee basis for these cases, meaning they only get paid a percentage of the recovery they secure for you, making skilled representation accessible without upfront costs.