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Arizona Auto Insurance & Crash Law · Citizen Guide 05
Uninsured & Underinsured Motorist Coverage
Arizona UM/UIM coverage protects qualifying insureds when the driver who caused the bodily injury has no qualifying liability insurance or does not have enough applicable liability insurance to compensate the loss. The two coverages solve different problems and should be analyzed separately.
UM and UIM answer different insurance failures
Uninsured Motorist
UM addresses a motorist who is uninsured within Arizona's statutory definition, including certain unidentified motorists and vehicles whose liability carrier cannot pay because of insolvency.
Underinsured Motorist
UIM addresses a motorist who has liability insurance, but the total applicable liability limits are less than the insured's total bodily- injury or death damages.
Arizona requires the insurer to offer UM and UIM
The statutory obligation is an offer-and-selection system. Arizona does not require every policyholder to purchase the offered coverage.
UM offer
The insurer must make UM available and make the required written offer to the named insured.
UIM offer
The insurer must separately make UIM available and make the required written offer to the named insured.
The named insured makes the statutory election
Once coverage is selected, the election governs the coverage available to persons who qualify as insureds under the policy.
Current Arizona UM begins with the statutory definition
Section 20-259.01(E) defines uninsured motorist coverage in relation to bodily injury or death caused by a motor vehicle lacking qualifying motor-vehicle liability insurance.
No qualifying liability policy
The accident-causing vehicle lacks a liability policy containing at least the minimum limits required by §28-4009.
Insolvent insurer
Section 20-259.01(D) includes a vehicle whose liability insurer cannot make payment because of insolvency.
Unidentified motorist
An unidentified accident-causing motorist can fall within Arizona UM, subject today to the corroboration rule for no-contact accidents.
A currently insured liability defendant is not automatically “uninsured” because the limits are inadequate
Current §20-259.01(E)-(F) draws a statutory line between UM and UIM. A motorist insured under a liability policy complying with §28-4009 is not treated as an uninsured motorist merely because the claimant's damages exceed the available liability protection.
UIM is a damages-and-liability-limits calculation
Section 20-259.01(G) defines the basic Arizona UIM relationship.
UIM becomes potentially applicable when the sum of applicable bodily- injury liability limits is less than the insured's total damages.
To the extent damages exceed those liability limits, the purchased UIM coverage applies to the difference, subject to the UIM limit and lawful policy and statutory provisions.
Taylor illustrates the function of UIM
In Taylor v. Travelers, the claimant was injured by her husband's negligence while both were insured under the same policy. Multiple injured people divided the liability coverage, leaving her uncompensated damages. The Arizona Supreme Court held that the policy could not eliminate the UIM protection otherwise available under §20-259.01(G).
Sharp confirms the importance of separate policies
In American Family v. Sharp, the Arizona Supreme Court permitted an insured to pursue UIM under her automobile policy after recovering liability proceeds under her husband's separate motorcycle policy.
An unidentified vehicle does not require physical contact—but a no-contact claim requires corroboration
Arizona's classic unidentified-motorist case is Lowing v. Allstate. The Arizona Supreme Court rejected an insurance-policy rule that made physical contact an absolute prerequisite to UM protection.
Corroboration means additional confirming evidence
Independent witness
Another motorist, passenger, pedestrian or bystander who saw the unidentified vehicle.
Video
Dashcam, intersection, business or residential surveillance footage.
Physical evidence
Skid marks, evasive steering data, vehicle telemetry or scene evidence consistent with the described event.
Other confirming facts
Any additional testimony, fact or evidence that strengthens the credibility of the insured's account.
UM/UIM protects insured persons—not everyone injured by an uninsured driver
Purchased coverage under §20-259.01 extends to all persons who qualify as insureds under the policy.
Named insured
The principal policyholder ordinarily sits at the center of the first-party insured class.
Resident family member
May qualify depending on the actual family-member or relative definition and household facts.
Occupant
Some policies extend UM/UIM insured status to a person occupying the covered auto.
Other claimant
A person outside the policy's insured definition does not acquire first-party insured status simply because an uninsured driver caused the injury.
Arizona does not permit every collateral payment to reduce UIM
Insurers sometimes include policy language attempting to reduce first- party benefits by payments received from another source.
Workers' compensation
The Arizona Supreme Court held that workers' compensation benefits could not be deducted when calculating UIM under §20-259.01(G).
Statutory calculation controls
Section 20-259.01(G) uses applicable liability bonds and liability insurance to define the UIM gap. Workers' compensation is not liability insurance.
Arizona UM/UIM is broad—but not limitless
Earlier Arizona decisions frequently emphasize liberal construction of UM/UIM protection, but that principle does not invalidate every policy definition or limitation.
Other-owned-vehicle restrictions
Cases such as Calvert and Higgins rejected certain attempts to remove UM/UIM protection from a person who already qualified as an insured based merely on the vehicle occupied.
Threshold insured status
Beaver confirms that §20-259.01 does not itself require every resident relative to be included in the insured class.
Vehicle outside statutory system
The 2025 Orlando decision confirms that Arizona's UM/UIM statute does not invalidate every limitation involving a vehicle outside the statutory motor-vehicle insurance framework.
Punitive damages
Wilson holds that Arizona's statutory UM/UIM scheme does not require the victim's insurer to pay punitive damages assessed against the tortfeasor unless the insurer specifically undertook that obligation.
Protect UIM before finalizing the liability settlement
A liability settlement and a UIM claim are related even though they arise under different insurance contracts.
Finding more than one UM/UIM coverage creates a second legal question
Section 20-259.01(H) permits an insurer, under specified circumstances, to limit multiple policies or coverages purchased by one insured on different vehicles to one selected policy or coverage.
One policy, multiple vehicles
Franklin establishes that separate vehicles within one policy can constitute separate UIM coverages for purposes of subsection (H).
Multiple household policies
The Arizona Supreme Court's 2026 Balzan decision addresses who constitutes “one insured” when policies were jointly purchased.
Arizona UM/UIM workflow
UM/UIM document checklist
- complete liability policy
- liability declarations page
- liability limits confirmation
- settlement/tender letter
- claimant's complete auto policy
- claimant's declarations page
- UM selection/rejection information
- UIM selection/rejection information
- all endorsements
- insured definitions
- household policies
- occupied-vehicle policy
- coverage letters
- reservation-of-rights letters
- UM/UIM denial
- crash report
- witness statements
- dashcam video
- surveillance video
- EDR / telemetry data
- medical records
- medical bills
- wage-loss documentation
- future-care evidence
- workers' compensation records if applicable
- proposed liability release
- first-party claim correspondence
Common UM/UIM mistakes
Calling every inadequate policy “uninsured”
Current Arizona law distinguishes UM from UIM. Insufficient liability insurance ordinarily presents a UIM question.
Assuming UM/UIM was automatically purchased
Arizona requires the offer. The named insured can select or reject the coverage under the current statute.
Ignoring insured status
A strong damages claim does not create first-party coverage for someone outside the policy's insured class.
Rejecting a phantom-vehicle claim because there was no contact
Arizona allows no-contact unidentified-vehicle claims if the statutory corroboration requirement is satisfied.
Applying every printed offset
Cundiff demonstrates that the statutory UIM calculation can invalidate a contractual offset.
Stopping after finding one UIM policy
Multiple policies and multiple vehicle coverages can materially change the available first-party protection.
Arizona authority map
Frequently asked questions
Does Arizona require me to buy UM/UIM?
Arizona requires qualifying insurers to make the coverages available and make the statutory written offer. The named insured can purchase or reject/select the coverage under §20-259.01.
Are UM and UIM the same thing?
No. Arizona expressly treats them as separate and distinct. UM addresses an uninsured motorist; UIM addresses inadequate applicable liability limits compared with the insured's total damages.
Does UIM pay automatically whenever the tortfeasor has minimum limits?
No. The claimant must qualify as an insured, have purchased applicable UIM protection and establish bodily-injury damages exceeding the applicable liability limits, subject to the policy and Arizona law.
Does a hit-and-run vehicle have to strike my car?
No. Arizona recognizes no-contact unidentified-vehicle claims, but §20-259.01(M) requires corroboration that the unidentified vehicle caused the accident.
What counts as corroboration?
Additional confirming testimony, facts or evidence that strengthens and adds credibility to the insured's account of the accident.
Can workers' compensation reduce Arizona UIM?
Cundiff held that a workers' compensation offset could not reduce UIM because §20-259.01(G) defines the UIM calculation using applicable liability insurance rather than workers' compensation benefits.
Does Arizona UIM cover property damage?
The statutory UM/UIM protection addressed in §20-259.01 concerns damages because of bodily injury or death. Vehicle/property damage requires separate coverage analysis.
Does Arizona UM/UIM pay punitive damages?
Arizona's statutory scheme does not require it. Wilson holds that the victim's UM/UIM insurer is not liable for punitive damages assessed against the tortfeasor unless it specifically contracted to provide that protection.
Can I have both liability recovery and UIM?
Yes, where the statutory UIM requirements are satisfied. UIM exists to address uncompensated bodily-injury damages when applicable liability protection is inadequate.
Should I settle with the at-fault carrier before opening UIM?
Identify and review the UIM coverage first. Read the policy, determine applicable liability limits and preserve first-party rights before signing a final release.
Can several Arizona UIM policies apply to one crash?
Potentially. Finding multiple applicable coverages does not itself determine whether all can be recovered. Guide 06 applies §20-259.01(H), Franklin and Balzan.
UM/UIM begins where the liability investigation becomes incomplete.
Determine the tortfeasor's insurance. Establish the claimant's insured status. Find every first-party policy. Calculate the complete bodily- injury damages. Apply Arizona's current UM or UIM definition. Test every proposed limitation against §20-259.01. Then determine whether multiple policies or coverages create a stacking issue.