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Arizona drivers who purchase bare minimum insurance may have to spend more

Arizona drivers who purchase bare minimum insurance may have to spend more

  • Updated

In the new bill, liability policies would have at least $25,000 worth of coverage for injuries caused to any one person.

Arizona motorists who purchase just the bare minimum liability insurance now  could be forced to spend more — if Gov. Doug Ducey goes along.

A measure approved Wednesday by the Senate Committee on Transportation and Public Safety would mandate that vehicle owners purchase policies which provide for at least $25,000 worth of coverage for injuries caused to any one person. The current minimum is just $15,000, a figure that was put in place in 1972.

SB 1087 boosts total coverage for all injuries in any one mishap from $30,000 to $50,000. And the property coverage — essentially damage to someone else’s vehicle — would go from $10,000 to $15,000.

How much more that would cost, however, remains a bit unclear.

Lobbyist Rob Dalager who represents groups backing the higher limits told lawmakers he has heard figures of anywhere from $3 to $8 a month.

He said, though, the only people affected are those who buy the bare minimum. The bills for those who already purchase more extensive coverage would remain unchanged.

Similar bills have failed in the past amid complaints from insurance industry lobbyists that the higher bills would result in some motorists choosing to ignore the law and purchasing no coverage at all.

So Sen. Kate Brophy McGee, R-Phoenix, scaled back this year’s version with slightly lower minimums in hopes of blunting opposition.

That apparently helped, with only Sen. Eddie Farnsworth, R-Gilbert, voting against the measure. He told Capitol Media Services after the hearing that his objections are philosophical.

“I’m not a big fan of mandatory insurance,” he said.

“Nobody mandates you have insurance in business,” Farnsworth said. “And you can do a lot of damage that way.”

The bill now goes to the full Senate. But securing legislative approval may be the smallest part of the problem.

Brophy McGee managed to get approval for her plan last year, only to have it quashed by the governor.

“I am open to the idea of revising our minimum liability limits,” Ducey said in his veto message.

But he also expressed concern that increasing those limits beyond what they were when he was 8 years old — he’s 54 now — would make insurance less affordable for those at the bottom of the income scale.

And that, he said, could result in some motorists choosing to drop coverage altogether, even though it’s required under state law and even though a first-time violation results in a $500 minimum penalty.

Gubernatorial press aide Patrick Ptak declined to comment Wednesday about whether his boss would be willing to sign this year’s version.

Attorney Geoff Trachtenberg, who for years lobbied for even higher liability limits, said Wednesday that he can live with the compromise. He said it reflects the average of what’s required elsewhere.

“We’re catching up to the national average,” Trachtenberg said. “So it will be just as safe to drive here as it is in any other state.”

Sen. Lupe Contreras, D-Avondale, acknowledged the increased financial burden on some of his constituents. But he said he sees this as providing protection for those who get into accidents.

Contreras said that many of the vehicles on the road cannot be replaced for the $10,000 maximum that an errant motorist’s insurance company would have to pay out. Any additional costs would be borne by the at-fault driver, assuming that person actually has the finances to make up the difference.

“I would want to protect them in a sense of them paying $3 to $8 more a month to make sure that they’re getting what they need out of their vehicles,” he said.

But Contreras said he is under no illusion that higher coverage for personal injury is going to make a significant dent in the kind of medical costs after a major accident. And that, he said, comes from personal experience.

“The limits were nothing close to my million-dollar bills from the hospital from being revived twice,” he said. That same 1990 accident also claimed the life of his 18-year-old sister.

“These liability limits, it doesn’t bring a person back, doesn’t do anything,” Contreras said, it but does provide at least some additional coverage. “You can’t put a price on a life when you’re talking about a few dollars a month.”

On Twitter: @azcapmedia

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