Full Coverage Insurance? Think Again.

Car insurance ads are pretty creative. Who knows how many millions insurance companies spend assuring customers during prime time viewing that there’s no need to fear a catastrophic event. The reality, however, is much less entertaining. Consumers are regularly getting taken for a ride by insurance companies.

Every state requires drivers carry a minimum amount of car insurance. Arizona’s minimum liability coverage is $15,000 per person and $30,000 per collision. This means if six people are hurt in a collision, they have to split the money — up to $30,000 between everyone who is hurt – and the most any one person can get is $15,000. Fifteen thousand dollars might sound like a lot of money. In a car wreck with injuries, however, bills add up fast. According to the Arizona Department of Health Services, the rates for Ground Ambulance Service are typically between one and two thousand dollars. Emergency room costs, particularly where intensive care, surgeries, or diagnostic tests and treatment are needed, can easily cost in excess of $20,000 in the first 24 hours. And in early 2018, the Arizona Daily Sun reported that Air Ambulance costs in the Phoenix had increased to over $20,000 as well. And the Arizona Department of Transportation has reported the average actual losses from a motor vehicle accident resulting in death in excess of $1.5 million.

Arizona’s minimum limits were enacted in 1972 and the levels have not changed since. Of course, it’s possible buy additional insurance, but insurance ads push consumers to save money by switching to their plan, rather than to buy more insurance. Insurance companies have no incentive to discuss adequate insurance rates with consumers, because doing so means that insurance companies will have to pay more money out when there is a claim. In fact, Arizona has a law which states that if consumers are not at fault for a collision and use their own uninsured or underinsured motorist coverage, the consumer’s insurance rates cannot be raised. Insurance ads never discuss this important law.

Some Arizona legislators and attorneys are trying to get Arizona consumers more protection and increase these minimum limits. Unfortunately, in the last legislative session, Arizona Governor Doug Ducey vetoed legislation that would have nearly doubled the amount of coverage. Getting the Governor and others to understand the core issues is not easy, but it needs to be done. And politicians aren’t the only stumbling block. Lobbyists for the Property and Casualty Insurance Association of America, have claimed higher limits in Arizona aren’t necessary.

Of course, consumers are concerned about rates for this mandatory cost, and some might argue that those at the low end of the economic spectrum might choose to violate the law and forgo purchasing insurance altogether. Premiums for those with minimum insurance would go up by $7.60 a month.
Check your insurance to see if it really covers you and your family in the event of a catastrophic wreck. And if all that contract language is fuzzy and confusing to you, talk to our lawyers or any lawyer who handles personal injury and wrongful death cases. Consultations are free at Bache & Lynch and one talk could save you a lot of money and grief in the future.