How Much Insurance is Enough?

Commercial Vehicle Minimum Coverage

Since 1972, minimum coverage in Arizona for passenger cars has been $15,000 per person, $30,000 per accident if two or more persons are injured, and $10,000 for property damage. In 1972, the average new car cost less than $5,000. The average new car cost is now over $30,000.

Uninsured and underinsured motorist coverage at one time was mandatory in Arizona. It has been optional since the mid 1980’s. A majority of the public does not buy it, as they don’t think they will ever need it. Think again. You need it, and you should buy it.

Different rules apply to commercial vehicles. If a non-passenger truck has a Gross Vehicle Weight (GVW) over 20,000 pounds, the minimum coverage is $300,000 per accident with no per person limit. If a non-passenger truck has a GVW over 26,000 pounds, the minimum coverage is $750,000 with no per person limit.

Passenger carrying commercial vehicles having a seating capacity of 8-15 passengers have a minimum limit of $750,000 with no per person limit and a required uninsured motorist coverage of $300,000 with no per person limit.

Passenger carrying commercial vehicles having a seating capacity of 16 or more passengers have a requirement of $5,000,000 in coverage with no per person limit and a required uninsured limit of $300,000.

In real life, here is what this means. Your typical box truck such as a U-Haul or delivery vehicle is only required to have a minimum policy of 15/30/10, the same as a passenger car. A Ford F-450 chassis that is used frequently for Class C motorhomes has a GVW listed as 18,500 pounds, so it falls under the minimum weight required for increased commercial coverage.

The shuttle vans you see at the airports can fall into either category depending on the stated passenger capacity. If under 16 passengers, the smaller limit of $750,000 applies. If 16 or more the larger limit of $5,000,000 applies. That includes buses such as Greyhounds and tour buses that typically carry 50 passengers.

An F-450 box truck can cause a lot of damage to you and your car. If you don’t have underinsured coverage, chances are very good that the box truck will only have minimum coverage. U-Haul, as an example only provides minimum coverage on their trucks. The renter’s policy is considered to be excess, but often renters don’t have good coverage either. Some personal automobile policies exclude coverage for larger vehicles depending on weight limits. Know your exclusions before declining extra coverage for a U-Haul or similar vehicle. U-Haul is not liable for a renter’s negligent driving, as the driver is not a U-Haul employee.

And if the driver of that 15 passenger van you are shuttling to the airport in runs a red light and many people are killed, injured or both, there is only $750,000 required to be available to divide up among the injured and the survivors.

And if that 50 passenger tour bus runs off the side of a mountain and all 50 passengers are killed or injured, there is only $5,000,000 required to be available to divide among the injured and the survivors.

In all three of the above cases, your underinsured policy will step up to cover the difference between your losses, and coverage available under the commercial policy. Don’t decline this valuable coverage for yourself and your family. Make sure to buy it in the same limits you buy liability coverage for.

Review your coverage with your agent. Protect yourself first. Never depend on “the other guy” to have adequate insurance, as most of the time, they don’t. “The other guy” who causes an accident is usually an irresponsible person with little or no coverage. Cover yourself first, last, and always, for any situation that may arise.

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