“Road crashes cost the U.S. $230.6 billion per year” (www.asirt.org). Car accidents are far too common and many people utilize insurance to help protect them against the financial expenses associated with an accident. Unfortunately, even in the best of circumstances, Arizona residents may run into car insurance problems. Here are the insurance problems we commonly see and how you can be sure to avoid them.
Problem #1: Uninsured or Underinsured
Many people simply don’t realize that opting out of auto insurance isn’t just a bad idea, it’s illegal and is very risky driving without insurance in Arizona. Arizona state law requires auto insurance minimums. That state minimum is currently $15,000 in bodily injury liability coverage per person and $30,000 per accident. There is also a $10,000 minimum property damage liability coverage requirement. There are stiff penalties if you choose to drive without insurance. If you are caught, you will face expensive fines, possible suspension of your driver’s license and an SR-22 certificate. An SR-22 certificate is a certificate filed by your insurance carrier with the Arizona MVD. This form is required when you have been identified as a high-risk driver. While the fee to file an SR-22 is nominal, your insurance company will view you as high risk and your rates will reflect the increased risk. If you are caught driving without insurance, the financial penalty and length of time your license is suspended increase in severity with each offense.
In the state of Arizona in one year, auto accidents cost 11 million dollars in medical costs and 1.04 billion dollars in work loss costs (www.cdc.gov/motorvehiclesafety/pdf/statecosts/az-2015costofcrashdeaths-a.pdf). The legal minimums may leave you underinsured and liable for expenses that exceed your insurance coverage. It is important that you factor in the cost of replacing your vehicle, possible medical or liability expenses and make certain you are not underinsured. Arizona is a fault state, meaning that if you are found at fault for causing an accident you are financially liable. Work with a professional insurance agent to ensure you don’t find yourself with a pile of problems from being underinsured.
Problem #2: Not Understanding the Claims Process
Having adequate insurance is just the beginning. Understanding how to use your auto insurance when you need it is another issue altogether. If you are in an accident, the claims process can seem daunting. There are several things you can do to avoid issues when filing a claim. First and foremost, report your loss or claim immediately. The longer you take to file, the more questions and potential issues you open yourself up to. Documentation and details are also critical to a successful claim. You should always get the insurance information of the other driver in the event of an accident but you should also take pictures if you are safely able to do so, obtain a copy of the police report if there is one and do anything else you are able to document the incident as thoroughly as possible. Documentation will help your insurer accurately review the details of your case and will speed up the process significantly. Work with your insurance company and communicate clearly with your claim adjuster. Clear communication will help expedite the process and make things overall much easier. If you have issues with a claim, contact your agent for assistance.
Problem #3: Not Understanding your Policy and Coverage
Not all insurance policies are created equal. While some coverage items are thought of as standard, it is important that you know what your policy covers and your coverage maximum amounts. In Arizona, you may not worry about flooding, but does your auto insurance cover damage caused by dust storms? Many people find themselves with problems in regard to comprehensive auto insurance. While the term comprehensive gives the impression that it covers everything, this is not entirely accurate. Comprehensive insurance is in place to cover damage done by something other than an accident. This may include weather damage or vandalism, but this is not guaranteed. You need to read your policy and work with an experienced agent to make sure you understand what is and isn’t covered. If you see any gaps in coverage riders or additional policies may be added to help improve your coverage.
Coverage limits and deductibles are also important parts of your policy. While it may be tempting to opt for a higher deductible in exchange for a lower monthly premium, beware. Your insurance company will not start paying on any claim until you have paid your deductible in full. While a $1000 deductible might get you a lower monthly payment than a $500 deductible, it won’t matter if you can’t afford the $1000 in the event of a claim. Make certain that you select a deductible you can afford. In addition, as touched upon when discussing being underinsured, carefully select coverage limits. Once your claim has exceeded the predetermined coverage limit, you may be financially responsible for any additional expenses.
A car accident is enough to deal with, contact our office and let us help you avoid these common problems. We work with multiple carriers to make sure that we can get you the insurance you need for the best price possible. We take the time needed to get to know our clients and help them select the insurance that best meets their needs. We can help you select coverage amounts and walk you through the claims process so that you know what to expect if you ever need to use it. Working with a skilled agent can help save you time, money and headaches down the road.