Key Takeaways
- Uninsured motorist (UM) coverage protects against drivers with no insurance, while underinsured motorist (UIM) coverage applies when at-fault drivers have insurance limits that are too low
- Arizona insurers must offer UM/UIM coverage to all policyholders, though drivers can explicitly reject it
- UM and UIM claims generally require written notice to the insurer within three years after the accident, with exceptions (A.R.S. § 12-555)
- Without UM/UIM coverage, people may face large out-of-pocket costs for injuries caused by drivers without enough insurance
- Hit-and-run accidents, unlicensed drivers, and drivers who never bought insurance are common situations where UM coverage becomes essential
Short answer: Uninsured motorist (UM) coverage pays when the at-fault driver has no insurance at all. Underinsured motorist (UIM) coverage applies when the at-fault driver has some insurance, but the policy limits fall short of the victim's actual damages. Arizona insurers must offer both coverages to every policyholder, and drivers can turn them down.
A car crash in Arizona can feel like too much to handle. That is even more true when insurance gets messy. It helps to know the difference between uninsured and underinsured motorist coverage. It could mean the difference between fair payment and serious money trouble. Both types of coverage are key safety nets when other drivers do not carry enough insurance.
Understanding Uninsured Motorist (UM) Coverage
Uninsured motorist coverage pays when the at-fault driver has no insurance at all. This happens more often than many Arizona residents realize. It creates real money risks for crash victims.
Common Scenarios for UM Coverage
UM coverage becomes essential in several cases:
- Hit-and-run accidents where the driver at fault flees the scene
- Unlicensed drivers driving without any insurance policy
- Drivers who simply never bought insurance even though the law requires it
- Accidents involving stolen vehicles where the thief has no coverage
In these situations, crash victims often find it nearly impossible to collect from the at-fault driver directly. Without UM coverage, people may end up paying for their own medical bills, lost wages, and other costs. They pay even though someone else's negligence caused the harm.
Underinsured Motorist (UIM) Coverage Explained
Underinsured motorist coverage deals with a different problem that is just as serious. This coverage applies when the at-fault driver has some insurance. But the driver's policy limits fall far short of the victim's actual damages.
When UIM Coverage Becomes Critical
Serious car crashes can create large costs that quickly go past low insurance limits:
- Severe injuries that need extensive medical care, such as traumatic brain injuries or spinal cord damage
- Long-term rehab and therapy that lasts months or years after the crash
- Large lost wages when injuries keep people from going back to work
- Permanent disabilities that need ongoing care and changes to daily life
Say a crash victim needs surgery, a long hospital stay, and months of physical therapy. The costs can far exceed Arizona's minimum bodily injury liability limit of $25,000 per person (A.R.S. § 28-4009). The at-fault driver may carry only the minimum coverage. Then there can be a large gap between the insurance money and the real damages.
Arizona's Legal Requirements and Options
Arizona law gives insurance companies specific duties for UM and UIM coverage. Drivers do not have to buy these coverages. But insurers must by law offer them to every buyer when the policy is sold.
The Offer and Rejection Process
Insurance companies cannot simply leave UM/UIM coverage out of the policy options. They must:
- Offer these coverage options to every policyholder
- Explain the basic protection these coverages give
- Make the offer in writing, on a form approved by the director. The policy declarations page is the final record of whether the policyholder bought or rejected the coverage.
This process helps drivers make informed choices about their insurance. It keeps them from going without coverage by accident just because they did not know about it.
Important Legal Deadlines
A.R.S. § 12-555 sets time limits for UM and UIM claims. For an underinsured motorist claim, two steps generally apply. First, the person must give the insurer written notice of intent to pursue the claim within three years after the accident. Second, the person must have made a claim with the at-fault driver's insurer, or filed an action against that driver. That must happen within the time limits of A.R.S. § 12-542.
The statute provides exceptions. One is when the person later learns the at-fault driver's coverage is not enough.
Separately, most Arizona personal injury lawsuits must generally be filed within two years after the claim accrues (A.R.S. § 12-542). There are exceptions.
If a public entity is involved, different rules apply. Claims against a city, county, state agency, or other public entity generally require a written notice of claim within 180 days after the claim accrues. The notice must include a specific settlement amount (A.R.S. § 12-821.01). The lawsuit must be filed within one year after the claim accrues (A.R.S. § 12-821).
Missing these deadlines can bar UIM benefits. This is true no matter how severe the injuries are, or how low the at-fault driver's insurance limits are.
The Financial Reality Without Coverage
Crash victims without UM or UIM coverage may run into drivers who lack enough insurance. When that happens, the money impact can be crushing. Doctors and hospitals still expect payment for ER visits, surgeries, and ongoing care. Employers may not give paid leave for as long as healing takes. Monthly bills keep coming even when injuries keep people from working.
This harsh reality makes UM/UIM coverage very valuable for Arizona drivers. The extra premium is fairly modest. It is small next to the costs a person may pay out of pocket after a serious crash with an uninsured or underinsured driver.
Making Informed Coverage Decisions
When reviewing insurance options, Arizona drivers should carefully think about their risk from uninsured and underinsured drivers. The choice to accept or decline UM/UIM coverage affects more than the person who holds the policy. It also affects family members. They may ride in the vehicle or drive it with permission.
These coverages give real protection. And many drivers carry little or no insurance. So drivers in this state have good reason to weigh UM/UIM coverage with care when it is offered.
Frequently Asked Questions
What happens if someone gets hit by an uninsured driver in Arizona?
If the crash victim has uninsured motorist coverage, their own insurer handles the claim, up to the policy limits. Without UM coverage, the person may have to rely on health insurance or other coverage. Or they may bring a claim against the driver with no insurance. That driver may not have the assets to pay a judgment.
How long do accident victims have to file underinsured motorist claims in Arizona?
Crash victims must generally give written notice to their insurance company within three years of the accident. This preserves their right to underinsured motorist benefits. There are exceptions (A.R.S. § 12-555). They must also make a claim against the at-fault driver's insurer or sue the driver within the time limits of A.R.S. § 12-542.
Can insurance companies refuse to offer UM/UIM coverage in Arizona?
No. Arizona law requires all insurance companies to offer uninsured and underinsured motorist coverage to every policyholder. Drivers can turn it down. But insurers must offer the option. They cannot simply leave it out of the policy.