Time for a change in AZ insurance law
If you want to legally drive a car in Arizona, you have to have liability coverage that protects anybody you might accidentally hit.
The problem is, if you want to, you can carry just $15,000 worth of such coverage — an amount that has remained unchanged since it was first set by the Arizona Financial Responsibility Act back in 1972.
What that means is that if you get hit by somebody who is carrying the minimum policy — whether you are driver, a bicyclist, or a pedestrian — the most you are going to recover from the driver’s insurance company is $15,000. And, sadly, most people on the road in Arizona carry the minimum coverage.
Arizona’s requirement is particularly low. Only four states in the U.S. require less coverage than Arizona; thirty-seven require more.
Now, in most collisions that involve modern, motorized vehicles, $15,000 is more than enough. Most of the time most people are not badly injured if they are inside a motorized vehicle.
But if they are hit while on foot or on bike, $15,000 often doesn’t even start to pay for their injuries. If you have an ambulance ride, a CT scan, and a couple of X-rays, you are probably going to be pushing that $15,000 policy limit pretty hard. Throw in a broken bone or an overnight stay, and you’ve exceeded it. You will owe the hospital money for your troubles.
The AZ legislature could easily bring Arizona in line with the times by increasing the minimum to $25,000 or more. This would provide much better protection for our state’s pedestrians and bicyclists, and the increase in coverage should cost the consumer very little (remember, unless a driver actually hits a cyclist or a pedestrian, he or she is still only going to pay whatever the costs are now — so the actual increase in rates should be small).
Of course, the likelihood of our legislature doing such a thing is nil.
If you are a bicyclist, please be sure you are carrying health insurance or, at a minimum, underinsured motorist coverage on your driver’s policy. This will usually protect you even while you are on your bike or on foot.
I too often see people in my office who have hospital bills that exceed or nearly exceed the minimum policy limits of the driver who hit them, and it breaks my heart to have to tell them that most likely the best we can do is make a sizeable dent in their hospital bills. It’s worse still when they have permanent injuries.
–Erik Ryberg
June 25th, 2010 at 8:37 am
“Only four states in the U.S. require less coverage than Arizona; thirty-seven require more.”
Ummm … (takes out calculator) … that makes 52 states altogether. And I thought being 46th out of 50 was bad. Now we’re 48th out of 52.
June 25th, 2010 at 8:52 am
@Rick
If you notice, 4+37=41 + Arizona = 42
Erik is not including ties.
June 25th, 2010 at 3:55 pm
I remember in Drivers Ed years ago, insurance was stressed as crucial not because it was something the law required, but to protect *your* assets and earnings if you were to cause an accident. If you had more to lose – you insured for more, simply because it was a good idea. I realize that not everyone owns a house, but has the whole concept of insurance shifted so much that one can only collect the insured amount and no more, rather than the insured being responsible for covering any amount over the limits of their insurance? Has asset forfeiture and wage garnishment become a thing of the past for uninsured/underinsured drivers who have assets and wages to cover at least *some* of what insurance doesn’t?
June 25th, 2010 at 4:20 pm
Hi Scott,
No, you can sue a person individually for what their insurance does not provide. You can also try to negotiate with them before suing them.
The trouble is, it is a *whole lot harder* and more expensive to collect in this fashion, and, the reality is that most people on the road are already mortgaged up to their ears and not able to pay any significant amount. If you win, you maybe win a hundred dollar check for the next seven years, and then good luck actually collecting that. The nice thing about collecting from a rich insurance company is you know you are actually going to get the check.
As a plaintiff’s attorney, I know that if I collect for a client from an insurance company, I am going to get paid. That means I don’t have any problem taking the case on a contingency fee. But from an individual? I have no idea if I will ever get paid for that, so I either work for free or I collect a retainer — which just puts the client even more at risk of losing money on the whole deal.
Erik
June 26th, 2010 at 10:21 am
Red Star will hazard a guess that the Arizona law (ca 1972, so you have to figure the discussion began in the late 1960’s) was a public policy measure to facilitate (as in expand or increase or encourage) automobile usage in Arizona: gotta keep up with LA. Many states were enacting such public policies back then.
June 26th, 2010 at 3:38 pm
You’ll have to forgive my ignorance here, but does medical insurance not cover vehicular related injuries? I thought it did. Thus, if you’ve got medical, it should cover what the other jerk’s insurance doesn’t.
That’s a bit of an aside, though. What I really want to bring up is that I’ve heard a lot of auto insurance agents (while trying to insure my wife’s Vespa) try to sell you extra insurance that covers you if you’re in other people’s cars or if you’re hit by someone else while walking on the street or riding a bike or whatever. This seems like an acknowledgment from the insurance companies that (a) “minimum coverage” isn’t worth the paper it’s printed on and (b) they can milk consumers for more cash on all sides until state legislatures bring the law up to snuff.
So, in the end, I pay for:
(1) Comprehensive + uninsured motorist + etc. on my vintage van and my wife’s vintage Vespa, which includes a ridiculous amount of coverage, some of which doesn’t even pertain to my own automobiles. This includes personal property theft from my vehicle.
(2) Renter’s insurance for my house (which even insures me if I’m not at home and were to get mugged on the street). This includes an instrument rider.
(2a) Flood and fire insurance if I want it.
(3) Health insurance for my wife and I.
(4) What I pay into medicare.
(5) Additional musical instrument insurance.
In many ways I am paying twice or more for the same protection and I am still not completely covered. It’s so cheap for me to pay for most of this that I think “Why not?” That’s exactly what the insurance companies want, too.
This is a _very_ long-winded way of saying that if I can afford more than the minimum then so can everyone else that feels the need to own a vehicle. There’s no excuse for the legislature not to raise the minimum, but don’t expect the insurance company lobbyists to go whispering into anybody’s ears that they should when they can double, triple and even quadruple dip off of people like me – ESPECIALLY when the government mandates that everyone MUST have insurance AND that the insurance companies MUST insure everybody, no matter the risk to the insurer.
-BP
PS. I’d be very, very afraid of riding in Arizona without some sort of insurance policy that covers me on my bike – whether that’s health insurance or the likes.
June 28th, 2010 at 10:17 am
And what if you can’t afford health insurance? Or, if you have it, what happens when you find out that your policy isn’t worth the paper it’s printed on?
July 3rd, 2010 at 10:29 am
I don’t see any practical alternative to support raising the ridiculously low minimums… but i do think we need some new tactics to address the cost-shifting that occurs when drivers drive (as many of them do!) with no or too-litle liability insurance.
Someone mentioned health insurance; that’s an excellent example of cost shifting. It shifts a cost that should be borne by drivers onto the health system — which ends up either being paid for by gov’t (e.g. medicaid) or reflected as higher health insurance premiums to everybody (if the injured person had health insurance elsewhere, like from his employer).
here is one radical proposal to “fix” auto liability that has been floating around for years:
http://azbikelaw.org/blog/31/
July 4th, 2010 at 9:37 pm
The proposed radical fix will never
take place because the government
won’t give up the authority and
insurance companies won’t take on
the responsibility. It is a very
low percentage of the ‘un’ and
‘under’ insured that end up
representing a cost to insurers.
Making sure all is well and good
with cars and drivers and the roads
won’t increase their profit margin
so why would they bother. The purely
radical and real fix would be to kiil
the game entirely. (outlaw insurance)
It could be that proportionately fewer
people would die and a huge amount of
money would be freed up for research
and prevention. But throwing money down
the endlessly greedy hole will remain the
status quo because it has become the only
thing we know. It works just often enough
to keep itself alive.
August 23rd, 2010 at 11:28 pm
My recent thoughts about this are that lumping the minimum for damage to cars and bodies and bikes is the problem. The cost of adding abortion, or six figures for injuries to bicyclists, are negligible.
So I would support a much higher min for bike only liability- or pedestrian as well.
I also think that if an insurer is willing to pay 15k quickly, then the injured needs an honest assessment of how much his claim against the at fault is worth. It can be sold even if one can’t do that as overtly and elegantly and directly as it nievely might appear. It has value- much greater value to teh injured then to the litigator. The litigators conflict must be disclosed. It’s not the value of the litigators time that is hard to retain given an open and shut case. It is getting proper advice to the injured about borrowing on the expected judgement- we see commercials for that so it must be legal, even if the lawyer can’t do the lending, others can and do it sure seems.
Criminal restitution should be pursued as a far more likely to be collelcted avenue. Raising theh policy limits deters restituion accordign the analysis I have seen- that is extremely demeaning to what level of skill is required from a litigator to get policy min’s in lieu of access to criminal justice.
The local market is not large enough apparently for much competition- unlike the token amount for car litigation.
If you are going to take 15k adn you know it then trhy to get it before agreeing to share it with a lawyer. The lawyer should increase teh amount and if they are not going to well above what a simple demand would get then how are they earning there fee?
Moswt wealthy people have much more then minimums. Ethically discovering just how much more isn’t trivial I bet, but seems doable.
I have had insurers pay an at fault driver on mhy behalf. I didn’t know they could do that without me being first actually liable procedurally. These torts are done so robotically it is part of the problem. Both sides got held in contempt for not communicating prior to this stealth settlement.
Finally insurance, is optional. If you have the cash you can just put it in the bank and not spend a dime of it unless you are ordered to. You are considered responsible if you encumber that same 15k in a cd. The probelm is you can’t then insure your loan on the car competively. I woudl lsupport a change in the availaibility of self insurance for bodilly claims- having a 3rd party who can pay as many claims as might accumulate could make a big difference.
One car can injure a dozen people- and that driver might only have 15k available for all of them, and not have vioilated the law. A fund for injured, paid by all, makes a lot of sense. If someone is at fault and hurts you, doctors etc. shoudl be paid, by the public, period. In there full amount, at least as much as insurance pays.
It is mos toffenseive that crime victims are supposed to have there docgtors discount there service. We the peopel can afford to pay quite easally. Again if it’s not the fault of the injured- insurance should be irrelevent. It shoudl be relevent that they are a victim of someone elses fault. Unfortunately it barely is relevent presently. Mandatory collection of money to pay for injured from all makes perfect sense, it is a cost of cars. Blaming the driver behind the wheel only more then approaches silliness, in most cases. It’s the driving- period, that causes the mayhem. At the very least all those who drive should be asked to cover the cost of healing those slaughtered from such a needless wantonly reckless vice no matter how lawfully responsibly it is proven to be practiced.