6.10 Reimbursement

• Jurisdiction: Arizona

Insurance carriers are permitted by A.R.S. Sec. 28-4009(C)(6)^[164] to include within their policies a provision requiring the insured to reimburse the insurance carrier "for any payment the insurance carrier would not have been obligated to make under the terms of the policy except for the [provisions of Arizona's Financial Responsibility Act]."

In State Farm Mutual Automobile Insurance Co. v. Read Mullan Motor Co.,^[165] the court examined a reimbursement clause in State Farm's policy, which provided:

"When certified as proof of future financial responsibility under any motor vehicle financial responsibility law and while such proof is required during the policy period, this policy shall comply with such law if applicable to the extent of the coverage and is required thereby; but not in excess of the limits of liability stated in this policy. The insured agrees to reimburse the company for any payment made by the company under which it would not have been obligated to make under the terms of this policy except for the agreement contained in this paragraph."^[166]

The court interpreted A.R.S. Sec. 28-1170(H), authorizing the reimbursement clause, to permit reimbursement only when the insurance...