If you renew you automobile insurance limits annually or semi-annually you may have noticed in the last few months an increase in your premium. This may be in part to a recent change in Arizona’s minimum limit for auto insurance liability. Beginning on July 1, 2020 auto insurance liability limits were increased from $15,000/$30,000/$10,000 to $25,000/$50,000/$15,000.
For the average person, these numbers most likely make no sense. And you’re probably wondering if this is just another way for insurance companies to charge you more on your insurance premiums. While that may seem so initially, this change is actually a good thing and I will try to explain why.
The three numbers $25,000/$50,000/$15,000 represent limits that are paid out to another person in the event you’re at fault in an accident.
The first two numbers represent “Bodily Injury Coverage“. This is what helps cover you if you are at fault in an accident that injures another person or persons. This coverage helps pay for their medical injuries, lost income and pain and suffering. The first number ($25,000) is the maximum amount your insurance company would pay out for each individual who is injured in an accident you caused. The second number ($50,000) is the maximum amount that would be paid out per accident, regardless of how many individuals are involved.
The last number of the equation ($15,000) is what’s referred to as “Property Damage Coverage”. This coverage is what helps pay for any property damage you cause to another party’s property. In this case, the maximum that would be paid out is $15,000.
While the increase in the minimum coverages required is a step in the right direction the new limits may still not be enough to provide protection for you and your family depending on the assets you need to protect and preserve. If you have an accountant or financial adviser you may wish to seek advice on what amount of coverage would be appropriate for your situation. The higher the liability limits you choose the protection you have in the event you’re involved in an automobile accident that is your fault.