Arizona Car Insurance Law
Every state has its own set of laws regarding financial responsibility for automobile accidents. These laws dictate the type of insurance required and minimum amounts of coverage, among other requirements. Arizona only requires drivers to maintain liability insurance, which pays out when the policyholder causes an accident resulting in injury or property damage. Arizona also allows drivers to establish financial responsibility in other ways besides getting a car insurance policy.
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Liability Insurance
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Arizona law requires drivers to obtain an insurance policy of at least $15,000 to cover injury to one person, $30,000 for injuries of two or more people and $10,000 for property damage. Bodily injury coverage does not apply to the driver in the basic required policy---if the driver wants coverage for medical injury regardless of fault, he should consider adding medical payments coverage to his policy.
Policy Cancellation
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According to Arizona law, once an insurance policy has been in effect for 60 days, the carrier can only legally cancel it for specific reasons. Carriers can cancel a policy if the insured fails to pay the premium or obtains it through fraud. Drivers who get their license suspended or revoked or have criminal convictions related to driving in the last three years can also face cancellation. Examples include leaving the scene of an accident, reckless driving or a drunk driving conviction. Cancellation can also result when a driver uses a passenger vehicle for commercial activity.
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Non-Renewal
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Carriers reserve the right not to renew policies under certain circumstances. In addition to the reasons listed for cancellation, an insurer can opt for non-renewal if within the three years preceding the renewal date the driver or someone covered under his policy has had at least three accidents in which he was at least 50 percent at fault. Each accident however, must have resulted in the carrier paying out a minimum amount of damages. This amount gets adjusted yearly; as of May 2010, the amount stood at $2,360 per accident. The carrier cannot choose non-renewal if the three instances occurred with different drivers or if the policy holder has had continuous coverage with the company for at least 10 years.
Automobile Insurance Plan
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Arizona has a program that helps drivers who cannot find insurance called the Arizona Automobile Insurance Plan. In order to apply for the plan, the applicant must confirm on the application that he has attempted to get regular coverage in the previous 60 days before the date of application with no success. The applicant must apply through an insurance carrier licensed to provide car insurance in the state. These carriers will submit applications to the Automobile Insurance Plan office through an electronic database in which the office administering the plan will review applications and assign the applicant to an insurance carrier.
The carrier will provide the applicant a quote for the desired level of insurance, which will be at least the state minimum, and the applicant must provide a deposit. The amount will depend on how the applicant chooses to make payments. Examples include paying 40 percent in advance with the balance due one month later or paying an 18.5 percent deposit followed by one payment every month for the remainder of the year.
Once accepted, the applicant will maintain coverage with the assigned carrier for three years. If the person cannot obtain a policy on his own after this time, he must reapply for the plan.
Alternatives to Insurance
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The law also permits drivers to make a deposit with the Arizona Department of Insurance for $40,000 in lieu of getting a policy. This can include a cash deposit or certificate of deposit among other things.
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