7.2 Uninsured Motorist Defined

• Jurisdiction: Arizona

Uninsured motorist coverage is defined by statute as follows:

"Uninsured motorist coverage", subject to the terms and conditions of that coverage, means coverage for damages due to bodily injury or death if the motor vehicle that caused the bodily injury or death is not insured by a motor vehicle liability policy that contains at least the limits prescribed in section 28-4009. For the purposes of uninsured motorist coverage, an uninsured motorist does not include a person who is insured under a motor vehicle liability policy that complies with section 28-4009.^[14]

The Arizona courts have observed that when the legislature enacted A.R.S. Sec. 20-259.01 "it was concerned with the problem created by the negligent driver who had no insurance at all."^[15] At least one court observed that "uninsured means literally not insured."^[16] However, a more expansive view of uninsured status has prevailed by adoption of the concept of functional uninsured status.

In Porter v. Empire Fire & Marine Insurance Co.,^[17] the court considered the circumstances that would give rise to a UM claim notwithstanding the presence of valid and collectible liability insurance. In Porter, the court considered whether a claimant could recover the difference between the amount received from the tortfeasor and the mandated minimum statutory liability limits of $15,000. Where the tortfeasor's liability limits are divided amongst several claimants, the tortfeasor will be considered to be functionally uninsured up to the amount required by Arizona's Financial Responsibility Act.^[18]

In Lowing v. Allstate Insurance Co.,^[19] the court held that an unidentified accident-causing motorist was functionally uninsured. Unidentified motorists are functionally uninsured as to the persons they injure, the court reasoned, because they have "no insurance that is in fact available and collectible."^[20]

Where the tortfeasor has purchased liability coverage but the insurance company becomes insolvent, the tortfeasor becomes an uninsured motorist.^[21]

In 1996, the Arizona Legislature amended A.R.S. Sec. 20-259.01 to include subparts (E) and (F) which effectively overruled Porter v. Empire Fire & Marine Insurance Co.^[22] A.R.S. Sec. 20-259.01(E) defines "Uninsured motorist coverage" as "coverage for damages due to bodily injury or death if the motor vehicle that caused the bodily injury or death is not insured by a motor vehicle liability policy" that contains at least the minimum limits of $15,000 per person and $30,000 per accident as prescribed in A.R.S. Sec. 28-4009. The statute provides that for "purposes of uninsured motorist coverage, an uninsured motorist does not include a person who is insured under a motor vehicle liability policy that complies with Sec. 28-4009."

The statutory amendment also addressed the "functional insured" status which had been created by Porter. A.R.S. Sec. 20-259.01(F) provides...