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Thu, May 23

Editorial: It’s worth looking at liability minimums, but be careful

Do you have enough car insurance? Is the state-required minimum enough nowadays?
Courier file photo

Do you have enough car insurance? Is the state-required minimum enough nowadays?

Usually when the editorial board of The Daily Courier discusses what opinion to take on a topic, we find consensus quickly. The subject of this editorial, however, generated a lot of heated debate.

We suspect the same will be true with residents, so our legislators who are considering raising the minimum amount of coverage a motorist must have in liability insurance should tread carefully.

The current law, which was enacted in 1972, states that a motorist must have liability coverage of 15/30/10, which is $15,000 bodily injury per person; $30,000 bodily injury per accident; and $10,000 in property damage.

It has been 46 years since those limits were set. Cars cost a lot more, and medical costs are a lot higher. The average cost to buy a car in 1972 was $3,879. In 2016, it was $25,332.

Medical costs have soared in the past five decades. The average liability claim for bodily injury in 2014 was $16,640. Both the average of property damage and bodily injury are now higher than the minimum amount of insurance required.

Since it has been so long and costs are much higher now, the legislature should look at raising the minimums. However, it’s no certainty they should raise them. There are other factors to consider.

First thing we want to stress is that cost of insurance can’t increase so much that people decide they would rather risk violating state law and operating a vehicle without any insurance. Currently, 12 percent of Arizona residents drive cars without any insurance, according to statistics released by the Insurance Information Institute.

We want to see that number go down, not up. Raising minimums will increase costs for insurance companies, and they no doubt will pass that along to consumers.

No one wants to see insurance cost more. However, people not having enough insurance could cost you anyway.

Say you’re in a crash that is not your fault. The other driver has only liability insurance, set at the state’s minimums. That means their insurance company is going to pay you only $10,000 for your now useless $50,000 truck. Your insurance company is going to have to make up the difference to replace it.

Different insurance companies have different policies, and no doubt your own driving record and how long you have been with them will be factors, but after such a large payout your insurance company very well may raise your rates, even if the accident wasn’t your fault.

The suggested new minimums under consideration would be 25/50/25. That would bring Arizona to about the national average. Now, only four states have lower minimums than Arizona.

Arizona has some of the lowest priced insurance in the nation, in part because of these low minimums. Still, we all want our lives, the lives of the people we love, and our vehicles to be protected from careless drivers we may encounter on the roads.

This editorial board is divided on if the minimums should increase or not. Lawmakers should consider this very carefully, recognizing the real-world consequences of any law they pass. Minimums may need to be increased, but the cost of insurance should be affordable so people struggling from paycheck-to-paycheck continue to be covered. Having more uninsured motorists on Arizona roads is good for no one.

Let’s get those convicted of multiple driving while under the influence off the roads. Increase the penalties for driving without insurance or driving with a suspended license. Make that cost higher, and then maybe more will be insured.

It has been 46 years since these minimums were set, and our lawmakers should look at them to see if adjustments are needed. But before voting to increase them, make sure you consider possible unintended consequences.


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