Things to Know by HHA
Read below for some of the things that we are keying in on here at Hester, Heitel and Associates!
Senate Bill 1087 Passes Increasing Minimum Limits
Arizona’s Minimum Limits for Autos Increases in 2020!
SB 1087: Vehicle Liability Insurance; Minimum Limits passed the Legislature on May 27 and was signed into law by Governor Ducey on Friday evening June 7.
SB1087 increases the minimum financial responsibility or limits of liability required to operate a motor vehicle in Arizona from 15/30/10 to 25/50/15.
$25,000 max Bodily Injury or death for one person in an accident
$50,000 max Bodily Injury or death for two or more persons in one accident
$15,000 max Property Damage in an accident
These new limits become effective for policies issued or renewed on or after July 1, 2020.
The existing limits had not been changed since June 1972. 47 years without a change is a long time. Many argued that the current 15/30/10 limits are grossly inadequate to cover the high cost for medical services and expenses to replace or repair today’s automobiles. While others argued that a driver should not be forced to purchase liability limits that exceed the value of their assets. Another general concern was that the unintended consequences of raising the limits would be an increase in uninsured drivers in Arizona as the higher premium costs may not be affordable to some policyholders who may drop their coverage.
SB1087 also makes several changes to ARS 20-259.01 - the Uninsured and Underinsured (UM/UIM) statute.
- The offer of uninsured and underinsured limits is to be made at the time of the application.
- The uninsured and underinsured policy declarations page is the final expression of the named insured’s decision to purchase or reject uninsured and underinsured coverage.
- The uninsured and underinsured policy declarations page must be sent to the named insured and is valid for and extends to and covers all persons insured under the policy.
- Insurers do not need to re-offer uninsured or underinsured coverage as a result of the changes to the increased vehicle minimum liability limits.
Language still remains in the UM/UIM statute protecting the insurance producers.
20-259.01 now reads “The offer of limits to a named insured or applicant shall be made at the time of the application on a form approved by the director. An insurance producer that uses such a form in offering uninsured motorist coverage satisfies the insurance producer’s standard of care in offering and explaining the nature and applicability of uninsured motorist coverage.”
(Same language for Part B the underinsured motorist coverage.)
Insurance producers still need to have the Uninsured/Underinsured Motorists Coverage Selection Form signed by the insured at the time of the application and also if there is a change in limits in order to keep this protection under the statute. (Please always include the premium on the Form.)
We also continue to strongly recommend that if the insured wishes to reduce or reject uninsured or underinsured coverage, ask the insured (in their own handwriting) to write the words "Rejecting against the advice of agency" on the Uninsured/Underinsured Motorists Coverage Selection Form.
The modifications to the uninsured and underinsured statute provides tort reform relief for the insurers as lawsuits on the coverage limits or the rejection of limits remains significant for them. Over time, insureds may forget that they rejected the coverage or what limits they selected on the Uninsured/Underinsured Motorists Coverage Selection Form. The insureds will now be reminded of their selection or rejection of limits as the declaration page with that information is sent to them upon renewals and with billings.
Best Practice Alert
How easy is it to identify a phishing scam on social media? Social media sites have long been the target of cybercriminals looking to gather personal information from users. However, these scams are not always easy to detect, and cybersecurity measures do not always catch phishing scams before they reach users. To learn more about how to identify suspicious posts and scams, read “Can You Spot a Phishing Tweet?”
Cyber Liability Insurance