7.11 Statute of Limitations

• Jurisdiction: Arizona

In Arizona, UM and UIM claims must be brought within 6 years after the cause of action accrues. In Transnational Insurance Co. v. Simmons,^[157] the court held that the 6-year statute of limitation period for contract actions, rather than the 2-year statute of limitation on tort actions, governed UM and UIM claims.

In Simmons the insurance company argued that the 2-year statute of limitation period set forth in A.R.S. Sec. 12-542, governing personal injury actions, was applicable to UM and UIM claims. The insurance company's argument was based upon the standard insuring clause that provides UM and UIM coverage, which the insured would be "legally entitled to recover" from the uninsured or underinsured motorist. The insurance company argued that the phrase "legally entitled to recover" requires an insured to establish every element of a claim for relief in tort, and that the timely filing of a suit within the 2-year limitation period in A.R.S. Sec. 12-542 was such an element. The court in Simmons rejected this argument, stating: "The words 'legally entitled to recover' simply mean that the insured must be able to establish fault on the part of the uninsured motorist which gives rise to damages and must prove the extent of those damages."^[158]

In 1999, the Arizona legislature statutorily adopted a 3-year statute of limitations for uninsured and underinsured motorist coverage. A.R.S. Sec.12-555 provides that an insurance...