The Personal Auto Policy form itself is covered in the national guide. On the Arizona Personal Lines exam (13-44), the state questions focus on the rules around the policy: compulsory 25/50/15 coverage, the uninsured and underinsured motorist offer, Arizona-specific coverage and rating rules, and cancellation and nonrenewal limits. This guide covers those rules with citations.

Compulsory insurance and minimum limits

• Arizona requires every vehicle operated on its highways to carry liability coverage meeting the state minimums, or another approved form of financial responsibility. Injured people recover from the at-fault driver (A.R.S. 28-4135, 28-4009).
• For policies issued or renewed on or after July 1, 2020, the minimum limits are 25/50/15: $25,000 bodily injury per person, $50,000 per accident, and $15,000 property damage (28-4009).
• An owner's policy covers the named insured and anyone using the vehicle with permission, in the U.S. and Canada.
• For a fleet of seven or more vehicles, the stated limit is the most payable per accident. Limits don't stack by vehicle.
• Proof of insurance must be in the vehicle and may be shown on a phone (28-4135). The insurer issues at least two ID cards (28-4133).
• Letting coverage lapse can lead to civil penalties and suspension of driving privileges, and for repeat violations, suspension of the registration and plates (28-4135(C)).
• The Arizona Automobile Insurance Plan (assigned risk) provides coverage for eligible drivers who can't get it normally. All auto insurers must participate (28-4008).

Uninsured and underinsured motorist coverage (20-259.01)

• Insurers must offer both UM and UIM by written notice on a Director-approved form. A producer who uses the approved form meets the standard of care for the offer.
• The declarations page sent to the named insured is the final expression of the decision to buy or reject.
• No new offer is needed at renewal, reinstatement, or modification.
• UIM applies when the total liability limits available from the at-fault driver are less than the insured's bodily injury damages.
• An insured vehicle whose insurer is insolvent counts as uninsured.
• Phantom vehicle. If an unidentified vehicle caused the accident without touching the insured's car, the insured must provide corroborating evidence.
• Anti-stacking. When several coverages could apply to one accident, the insurer may limit recovery to one coverage the insured selects.
• UM/UIM need not be offered with umbrella, excess, or commercial liability policies.
• A medical payments insurer may have a lien on the insured's recovery for med pay paid above $5,000.

Other Arizona auto rules

• Glass. An insurer writing comprehensive coverage must offer, at the insured's option, glass coverage without a deductible (20-264).
• Surcharges. An insurer may not raise the premium for an accident the insured didn't cause or significantly contribute to (20-263).
• Minimum-limits policy. On request, insurers and producers must make a policy at the minimum limits available to qualifying applicants (20-266).
• Monthly payment plan. At inception, the insurer may require no more than the first month plus 1.5 times the monthly premium (20-267).
• Grace period. Motor vehicle policies have at least a 7-day grace period for premiums after the first. After it ends, a nonpayment cancellation is effective on the date the notice is sent (20-1632.01).
• Excluded drivers. A written agreement excluding a named driver stays in effect at each renewal until removed in writing.
• Rideshare. A personal auto policy need not cover the vehicle while the driver is logged into a transportation network company app, unless the policy or an endorsement expressly covers it.
• Producer of record. A producer who owns the policy expirations generally stays producer of record if the insurer terminates the producer's contract (20-1631(H)).

Cancellation and nonrenewal (20-1631 to 20-1633)

Scope. The rules don't apply to a new policy in force fewer than 60 days (unless it's a renewal), vehicles that aren't private passenger, garage risks, or excess-only policies.

Reasons. After 60 days, cancellation is allowed only for listed grounds:

• nonpayment
• fraud or material misrepresentation
• license suspension
• specified convictions, such as DUI or reckless driving, during the policy period or the 36 months before it

An accident is not a ground.

Excluding instead of cancelling. If the problem driver isn't the named insured, the insurer may not cancel when the named insured agrees in writing to exclude that driver.

Prohibited reasons. Insurers may not cancel or nonrenew solely because of residence location, age, race, religion, sex, or national origin. They may nonrenew if the named insured moves to another state.

Notice:

• The notice must state the specific reasons, the right to complain to the Director within 10 days, and possible assigned risk eligibility.
• Defective notice makes the cancellation or nonrenewal invalid.
• The Director rules on an objection within 15 days.

Claims (R20-6-801(H))

• Total loss. A cash settlement is based on a comparable auto, including taxes, license fees, and transfer fees, less the deductible.
• Repairs. Claimants may not be required to travel unreasonably for estimates or repairs.
• Subrogation. On request, the insurer includes the deductible in its subrogation demand. The insured may also sue separately for uncompensated damages (20-268).

Common exam traps

• Arizona's minimum limits are 25/50/15. The property damage figure is $15,000.
• UM and UIM must be offered on an approved form, and the declarations page records the decision.
• Glass coverage with no deductible must be offered.
• Notice is 10 days to cancel and 45 days to nonrenew.
• A not-at-fault accident can't trigger a surcharge.