The amount of car insurance you need depends upon many factors. You first have to understand that in the State of Arizona the minimum requirements are for liability insurance only. While liability is essential for every owner of a motor vehicle, it is only one part of a complete auto insurance package.
So what is the necessary insurance coverage in Arizona? The state mandates liability coverage in the amount of $15,000 for an accident involving bodily injury with one person, $30,000 for an incident with more than one person who sustains bodily injury, and $10,000 for property damage in any incident.
These minimum coverage limits mean that if you are found to be at fault in an accident, and there is personal injury and/or property damage to one or more parties, your insurance coverage will pay up to $15,000 for one person’s injuries, a total of $30,000 for two or more person’s injuries, and $10,000 total for all property damage you caused. It is easily apparent that in any type of a serious accident these limits would not be enough to cover damages.
The only person who should carry minimum liability coverage is someone who cannot afford increased limits, and has no assets or property or the potential in the future to obtain property. Everyone else should increase their liability limits to a minimum of $100,000 per person, more per incident, and property protection of $25,000. If you can afford more, you should take out the most you can pay. This added protection is well worth the premium cost. If you are in a serious accident, your insurance company will have the ability to settle most any claim. You can never have too little liability insurance in the State of Arizona.
Liability coverage is just the beginning in determining the necessary insurance coverage for an individual. The next step is collision coverage. If you have a car loan, you probably will be required to have this protection. It pays to repair your car when you cause the damage. The only reason not to have collision coverage is if your car has little value, and you can afford to replace it. Otherwise, you should purchase collision coverage in an amount sufficient to repair your car, or replace it if it is a total loss.
A companion coverage to collision is comprehensive. This covers loss to your car not caused by an accident. An example would be if someone stole your car. A cracked windshield would also fall within comprehensive coverage. Again, you need this coverage in an amount equal to what you determined you needed under collision.
When you drive your car, you assume everyone has liability insurance. That is not always true, and if you are in an accident with an uninsured driver, you would have no one to pay for your damages. This is when you need uninsured motorist coverage. It will pay your damages when the party who is liable does not have insurance. What about the situation when the person does have liability insurance but only for the minimum amounts discussed earlier? You could be left with an insufficient amount to pay for your personal injuries and property damage. The answer is underinsured coverage for bodily injuries. It would pay after the other person’s insurance is exhausted. Purchase both in an amount equal to your own liability limits.
One final coverage is medical payments which pays medical bills incurred in any accident, and should be in amount of at least $1,000.
The bottom line is make sure your coverage protects you and your assets in an sufficient amount.