Arizona Auto Insurance: Who's Responsible?

Arizona requires that every motor vehicle on the road be covered by a car insurance policy that meets certain minimum requirements. This means that insurance follows the car, and the owner is responsible for ensuring that their vehicle is insured. However, if the car is involved in an accident, the driver will be responsible for any resulting harm, and their insurance policy may act as secondary coverage if the owner's insurance coverage is insufficient.

Arizona's fault-based system

Arizona requires that every motor vehicle on the road be covered by a car insurance policy that meets certain minimum requirements. This means that the insurance follows the car, and not the driver. However, the points surcharged for any accidents caused will follow the driver. In other words, if you cause an accident while driving someone else's car, their insurance will cover the costs, but the accident points will accumulate on your driving record, likely increasing your policy rates.

Arizona follows a traditional "fault"-based system when it comes to financial responsibility for losses stemming from a car accident. This means that the person who was at fault for causing the car accident is also responsible for any resulting harm. In practical terms, this means that the at-fault driver's insurance carrier will absorb these losses, up to the policy limits.

The minimum requirements for liability car insurance coverage in Arizona are:

• $25,000 for bodily injury to or death of one person in an accident caused by the driver of the insured vehicle
• $50,000 for bodily injury to or death of two or more people in an accident caused by the driver of the insured vehicle
• $15,000 for property damage per accident caused by the driver of the insured vehicle

These minimum coverage requirements were updated in 2020, and any policies issued or renewed after July 1 of that year must comply with these new limits. If your current coverage limits are below the new required limits, your coverage limits will automatically be increased to the minimums when your policy renews, and your premium may increase as well.

In addition to the minimum requirements, Arizona also requires that all motor vehicles in operation on the state's roads be covered by liability insurance through a company authorized to do business in the state. This includes not just cars and trucks, but also golf carts, motorcycles, and mopeds.

Minimum insurance requirements

In Arizona, car insurance usually follows the car rather than the driver. This means that if you lend your car to someone and they have an accident, your insurance will cover the cost of any damage. However, it is important to note that the accident points will go on the driver's record, which will likely increase their policy rates.

Arizona requires that every motor vehicle on the road be covered by a car insurance policy that meets certain minimum requirements. These requirements are in place to ensure financial responsibility in the event of a traffic accident. As of July 1, 2020, the minimum coverage limits are as follows:

• $25,000 for bodily injury or death of one person in any one accident.
• $50,000 for bodily injury or death of two or more persons in any one accident.
• $15,000 for injury to or destruction of property of others in any one accident.

These minimum coverage limits are known as "25/50/15 coverage limits" and are required for all new auto insurance policies issued or renewed on or after July 1, 2020. If your current coverage limits are below these minimums, your insurance provider will automatically increase them to the new required limits when your policy renews. As a result, your insurance premium may also increase to reflect the additional coverage.

It is important to note that these minimum requirements are subject to change, and Arizona drivers should stay up-to-date with any potential changes to the minimum coverage limits or other insurance requirements. Additionally, insurance companies may offer additional coverage options beyond the minimum requirements, and it is recommended to carefully review your policy and consider your specific needs to determine if additional coverage is necessary.

Proof of insurance

Arizona requires that every motor vehicle operated on roads in the state be covered by liability insurance through a company that is authorized to do business in Arizona. This includes golf carts, motorcycles, and mopeds.

Drivers are required to have proof of financial responsibility when operating a motor vehicle on Arizona roadways. Most people demonstrate their financial responsibility by buying an auto insurance policy. On and after July 1, 2020, all new auto insurance policies that are issued or renewed must be provided with at least 25/50/15 coverage limits. This means that the policy must include:

• $25,000 because of bodily injury to or death of one person in any one accident.
• $50,000 because of bodily injury to or death of two or more persons in any one accident.
• $15,000 because of injury to or destruction of property of others in any one accident.

If your current coverage limits are below the new required coverage limits, your coverage limits will automatically be increased to the minimums when your policy renews. Your auto insurance premium may increase to reflect the increased amount of insurance coverage.

If you discontinue your insurance, you must notify the Arizona Department of Transportation (DOT) by logging in to your AZ MVD Now Account and going to Registration > Insurance Management > De-Insurance. Before you resume driving in Arizona, you must reinstate your Arizona insurance policy, and your insurance company will notify the DOT. Failure to maintain proper insurance could lead to the suspension of your vehicle registration and/or driver's license.

Arizona accepts electronic proof of insurance. If you have a smartphone, a tablet with 3G, or another electronic device with internet access, you can easily pull up your insurance policy for verification.

Insurance following the car

In Arizona, car insurance typically follows the car, rather than the driver. This means that if you lend your car to someone else and they have an accident, your insurance will cover the cost of any damage to other people or their property. However, the person driving will be responsible for any points on their license, and the accident may cause their insurance premiums to increase.

The "omnibus clause" means that most auto insurance policies will cover another driver, as long as they have a valid driver's license and permission to drive the car. This usually includes family members and dependent children living away from home. However, the driver must have the car owner's permission to drive, and the owner should check their coverage limits and deductible beforehand.

In Arizona, all vehicles on the road are required to be covered by a car insurance policy, and drivers must be able to show proof of insurance if asked by a law enforcement officer. This can be done by presenting an insurance card or digital proof on a phone. Failure to provide proof of insurance can result in suspension of the vehicle's registration and/or the driver's license.

Arizona has minimum requirements for liability car insurance coverage, which includes $25,000 for bodily injury or death of one person, $50,000 for bodily injury or death of two or more people, and $15,000 for property damage per accident. These coverage limits were updated in 2020 and apply to all new policies issued or renewed after that date.

The 'omnibus clause'

In Arizona, car insurance usually follows the car rather than the driver. This means that if you lend your car to someone and they have an accident, your insurance will cover the cost of any damage. However, this is a complex area, and there are some exceptions. Arizona drivers are required to have proof of financial responsibility when operating a vehicle, usually in the form of auto insurance.

The omnibus clause is a provision in standard automobile liability policies that expands the coverage of the policy to include any person using or responsible for the use of the insured vehicle during an incident, as long as they have been granted permission to use the vehicle by the principal insured party. This permission can be either express or implied. The omnibus clause applies to individuals who are authorized to use an insured vehicle. This means that if a parent allows their child to borrow the family car, and the child then allows a friend to drive the vehicle, the omnibus clause would apply.

The clause can refer to any member of the insured's household, as well as to any person using the automobile with the insured's permission or knowledge. This includes any person who could be held liable for the insured's negligence or for the negligence of a permissive user. This means anyone who is vicariously liable for negligence committed by the named insured or an authorized driver.

However, it is important to note that courts may differ in their interpretation of the omnibus clause. Some courts have ruled that a named insured’s grant of unrestricted use of a vehicle to another individual includes the power to permit other individuals to use the car. In this case, the omnibus clause would apply. However, other courts have held that the insured’s silence does not give the first permittee the capacity to delegate permission to a second party. In this case, a second permittee using the car would be denied coverage because they did not have the required permission from the named insured.

Frequently asked questions