When I ask my clients, “What insurance coverage do you have on your vehicle?” they often respond by saying “I have full coverage, I am completely covered.” When I get their actual coverage information from their insurance company, I often find that the coverage they purchased does not cover what they expected it to cover.

What their insurance agent described as “full coverage” may not cover the driver or their passengers for injuries sustained in a collision. Over the years I have found that full coverage, more often than not, turns out to be comprehensive and collision coverage on the vehicle. Each of these types of insurance coverage applies only to the damage to the vehicle and possibly property within the vehicle.

Here is an actual example of what effect that misunderstanding can have on your life:

My client suffered a broken neck as a result of a horrible collision with another vehicle. The other driver was Driving Under the Influence and not insured. Obviously, he was not able to work with a broken neck.

My client was told that he had “full coverage” in order to get a loan to buy his car in the first place. What he did not know is that the forced insurance coverage only protected the bank’s investment, the car. So, he had plenty of coverage to get his car repaired but no coverage for his injuries or lost work.

The coverage that would have helped him in this scenario is called Uninsured Motorist coverage. The drunk driver who hit him did not have any money or assets to cover the injuries either. Unable to work, he could not make his car payments, so the bank repossessed the newly repaired vehicle. Unfortunately, there was nothing I could do to assist him further with the case.

Recently there has been a number of companies who advertise that they will get you the state mandated minimum insurance. It is extremely important to understand that Arizona Law only requires that every driver carry liability insurance. Liability insurance is important but does not protect you in many circumstances. Furthermore, the minimum coverage in Arizona is only $15,000 for “bodily injury” liability. I always tell my clients that it is highly advisable to carry substantially more than that. Here is why:

If you are ever found to be at-fault for an accident and the other person is injured, you can be held personally liable. That means that if your insurance coverage does not pay all of their damages, they may be entitled to your assets and income  to make up the difference.

The same goes for property damage. If you are at fault for an accident, and only carry the state required minimum coverage ($10,000) it only pays for the “other” vehicle to be fixed or replaced. If you damage an expensive vehicle or are responsible for a multi-vehicle accident, you will undoubtedly need more than the state minimum coverage.

Perhaps more importantly, your liability insurance does not protect you or your passengers when they are injured as a result of your negligence. I have always recommended that my clients, family, friends, and anyone that asks; make sure that you carry both Uninsured (UM) and Under Insured Motorist (UIM) coverage. That coverage protects you if you or your passengers are hurt due to the negligence of another driver if they are uninsured or underinsured.

As your lawyers, we are here, to answer questions for you. It can be complicated to figure out what coverage you have and exactly what it covers. Call us with any questions, and we will be happy to answer them.