While almost everyone knows they are required to carry liability insurance for their vehicles in case they cause an accident, not everyone knows how important vehicle insurance can be if you are injured by someone else. In Arizona, insurance can protect you if you are injured by someone else who either does not have insurance or does not have enough insurance to cover your medical expenses and other damages. This is why the State of Arizona requires insurance companies to offer Uninsured Motorist coverage (“UM”) and Underinsured Motorist coverage (“UIM”).
Arizona UM and UIM coverage is codified in A.R. S. § 20-259.01. “Every insurer writing automobile liability or motor vehicle liability policies shall make available to the named insured thereunder and by written notice offer the named insured and at the request of the named insured shall include within the policy uninsured motorist coverage that extends to and covers all persons insured under the policy, in limits not less than the liability limits for bodily injury or death contained within the policy. …” A.R.S. § 20-259.01(A). “Every insurer writing automobile liability or motor vehicle liability policies shall also make available to the named insured thereunder and shall by written notice offer the named insured and at the request of the named insured shall include within the policy underinsured motorist coverage that extends to and covers all persons insured under the policy, in limits not less than the liability limits for bodily injury or death contained within the policy.” A.R.S. § 20-259.01(B). “‘Uninsured motorist coverage’, subject to the terms and conditions of that coverage, means coverage for damages due to bodily injury or death if the motor vehicle that caused the bodily injury or death is not insured by a motor vehicle liability policy that contains at least the limits prescribed in section 28-4009. For the purposes of uninsured motorist coverage, an uninsured motorist does not include a person who is insured under a motor vehicle liability policy that complies with section 28-4009.” A.R.S. § 20-259.01(E). “‘Underinsured motorist coverage’ includes coverage for a person if the sum of the limits of liability under all bodily injury or death liability bonds and liability insurance policies applicable at the time of the accident is less than the total damages for bodily injury or death resulting from the accident. To the extent that the total damages exceed the total applicable liability limits, the underinsured motorist coverage provided in subsection B of this section is applicable to the difference.” A.R.S. § 20-259.01(G). “Uninsured and underinsured motorist coverages are separate and distinct and apply to different accident situations. Underinsured motorist coverage shall not provide coverage for a claim against an uninsured motorist in addition to any applicable uninsured motorist coverage. …” A.R.S. § 20-259.01(H).
UM coverage requires “vehicle liability policies to provide coverage for injuries resulting form accidents with uninsured or unknown vehicles.” State Farm Mut. Auto. Ins. Co. v. Wilson, 162 Ariz. 251(AZ S. Ct. 1989). “UIM coverage provides indemnification when a negligent motorist is inadequately insured.” Taylor v. Travelers Indem. Co. of Am., 198 Ariz. 310 (AZ S. Ct. 2000). “[W]hen the injured person’s insurer pays under UIM coverage, the insurer steps into the place of the tortfeasor for the purpose of paying the damages of the injured party.” State Farm Mut. Auto. Ins. Co. v. Arrington, 192 Ariz. 255 (AZ App. Ct. 1998). “Arizona has a mandatory offer provision for both UM and UIM insurance requiring insurers to make written offers of each type of insurance. Insurers must then make these coverages available at the request of the insured to cover all persons insured under the policy in limits not less than the liability limits for bodily injury or death contained within the same liability policy.” Taylor, 198 Ariz. 310. The Arizona legislature, as interpreted by the Arizona Supreme Court, “intended a broad application of UIM coverage to provide benefits up to the policy limits whenever the insured is not indemnified fully by the available limits of liability.” Taylor, 198 Ariz. 310.
In other words, UM coverage provides insurance to someone injured when the person causing the accident does not have insurance (or is unknown, like in a hit and run) and UIM coverage provides insurance when the at fault driver does not have enough insurance to reimburse the injured person. In most circumstances, UM and UIM insurance coverage will be in the same amount as the underlying policy. So, if your insurance policy provides for $100,000 coverage per person in an accident up to $300,000 total for an accident you cause, the same coverage will likely apply for UM and UIM claims.
While these general provisions are straightforward, there can be a great deal of nuance when UM and especially UIM coverages are applied in real life. For example, what if you are the passenger in your spouse’s car and your spouse causes an accident, injuries others but you are also injured? What if you are driving a friend’s car and are injured by someone without insurance? What if you are driving a friend’s car, you cause an accident but you are also injured? These are just some examples of the virtually unlimited scenarios that can happen while driving. Getting as much detail as possible and providing a trusted attorney with all of the information will allow you to know all available coverage and come to the best possible result.
It is not difficult to imagine a scenario where UM and UIM coverage benefits the policy holder. I have represented clients in both UM and UIM cases and they are always incredibly grateful for the UM and UIM provisions in their insurance policy. The key takeaway here is that an injured party can have recourse against their own insurance company if they are injured, however the injured party will likely only be able to recover up to the limits of their own insurance policy. It is critical to evaluate your own insurance to make sure you are comfortable with the amount of coverage you have in the unfortunate case you are in an accident. Reaching out to your insurance company to have a discussion about how much insurance is appropriate is never a bad idea.
