STATE LAW – ARIZONA LIBRARY – GUIDE 05
Uninsured & Underinsured Motorist Coverage
How Arizona UM and UIM coverage works, when the statutory protection applies, what the insurer must offer, how UIM gap coverage is calculated, and the 2025 Arizona Supreme Court limitation for certain off-road vehicle accidents.
Arizona requires insurers writing motor-vehicle liability policies to offer UM and UIM coverage, but the statutory protection has defined limits.
UM
Uninsured motorist coverage addresses bodily injury or death caused by a motor vehicle that lacks
qualifying liability insurance, subject to the statute and policy.
UIM
Underinsured motorist coverage applies when total applicable bodily-injury liability limits are less
than the insured’s total damages, with UIM covering the uncompensated difference up to the applicable UIM limit.
Off-road limitation
State Farm v. Orlando holds that Arizona law does not require UIM coverage for an off-road ATV
accident like the one before the Court. In that setting, coverage may turn on the contract.
Current-law rule:
Do not state that Arizona UIM automatically follows an insured in every accident involving an underinsured
tortfeasor. First confirm that the accident falls within the statutory motor-vehicle framework and then apply
the policy and A.R.S. § 20-259.01.
01 · Coverage Framework
UM and UIM are related but separate Arizona coverages.
Uninsured motorist coverage
A.R.S. § 20-259.01 requires insurers writing qualifying automobile or motor-vehicle liability policies
to make UM coverage available and offer it in writing to the named insured.
Underinsured motorist coverage
The same statute requires a written offer of UIM coverage. UIM is designed to address the gap between
total damages and the bodily-injury liability insurance available from the responsible party.
Separate and distinct:
A.R.S. § 20-259.01(H) states that UM and UIM coverages are separate and distinct and apply to different
accident situations.
02 · Offer Requirements
The statutory offer and the declarations page matter.
Written offer
- UM and UIM must be offered to the named insured in writing.
- The approved offer form is central to the statutory process.
- The insured may purchase limits up to the bodily-injury liability limits, subject to statutory minimums.
Declarations page
- The current statute treats the declarations page as the final expression of the named insured’s purchase or rejection decision.
- Confirm the actual UM/UIM limits shown.
- Do not assume the liability limit and UM/UIM limit are identical without checking the policy.
03 · UIM Gap Coverage
Arizona measures UIM from total damages and applicable liability limits.
1
Determine total damages
Evaluate the insured’s bodily-injury damages under Arizona law.
2
Determine applicable liability limits
Identify all bodily-injury liability bonds and policies applicable at the time of the accident.
3
Compare damages with liability limits
Under § 20-259.01(G), UIM applies to the extent total damages exceed the total applicable liability limits,
subject to the available UIM limit and other valid statutory or policy provisions.
Taylor
Taylor v. Travelers is a central Arizona UIM case holding that the statutory UIM protection
cannot be eliminated by a policy exclusion that conflicts with the coverage required by § 20-259.01(G).
Cundiff
Cundiff v. State Farm holds that workers’ compensation benefits are not liability insurance
under § 20-259.01(G) and cannot be inserted as an additional offset from UIM coverage under the statutory definition.
04 · 2025 Current-Law Update
State Farm v. Orlando limits broad statements about UIM coverage for off-road vehicles.
The Arizona Supreme Court considered an insured injured as a passenger in a Polaris ATV at the Imperial Sand Dunes.
The accident occurred off a public road, and the State Farm policy excluded vehicles designed primarily for off-road use
except while on public roads.
Statutes read together
The Court read Arizona’s Uninsured/Underinsured Motorist Act together with the Financial Responsibility Act
to determine the threshold meaning of “motor vehicle” for mandatory UIM protection.
Off-road ATV result
The Court held that UIM coverage for the off-road ATV accident before it was neither required nor prohibited
by Arizona’s UM/UIM statute.
Contract controls in that circumstance
Because the statute did not mandate UIM coverage for that off-road accident, the policy’s definition excluding
the off-road ATV was enforceable in the case.
Do not overread Orlando.
The decision does not authorize unrelated UIM exclusions. It addresses the threshold statutory scope of
mandatory UIM protection for an off-road vehicle accident outside the Financial Responsibility Act’s required-insurance framework.
05 · Claim Deadlines
Coverage can be lost by missing Arizona’s UM/UIM timing rules.
A.R.S. § 12-555
Arizona has a separate statutory timing framework for UM/UIM claims. It addresses written notice,
accrual in specified circumstances, and later arbitration-or-suit requirements after prescribed insurer notice.
Preserve the timeline
- Date of accident.
- Date the tortfeasor’s insurance status became known.
- Date of liability settlement or exhaustion where relevant.
- Date written UM/UIM notice was sent.
- Date of any insurer notice triggering arbitration-or-suit obligations.
06 · Coverage Workflow
Audit UM/UIM in a fixed order.
Step
Question
Record
1
Was UM/UIM offered and what limits were selected?
Offer form, declarations, endorsements.
2
Is the claimant an insured under the policy?
Named-insured, resident-relative, occupancy, or other insured-status language.
3
Does the accident fall within Arizona’s statutory motor-vehicle framework?
Vehicle type, registration status, road location, policy definitions, Orlando analysis if off-road.
4
For UIM, are total damages greater than applicable liability limits?
Damages evaluation and all applicable liability coverage.
5
Are multiple UM/UIM coverages available?
Move to UM-030 for stacking, Franklin, and Balzan.
6
Have all notice and suit/arbitration deadlines been preserved?
A.R.S. § 12-555 timeline and claim correspondence.
07 · Authorities
Authorities for this Guide
A.R.S. § 20-259.01
Arizona UM/UIM Statute
Governs the written offer of UM and UIM coverage, statutory definitions, UIM gap coverage, stacking,
subrogation, and related motorist-coverage rules.
Official source · Arizona Legislature
A.R.S. § 12-555
UM/UIM Claims & Time Limits
Establishes Arizona’s statutory timing framework for UM and UIM claims, including written notice and
later arbitration-or-suit requirements in specified circumstances.
Official source · Arizona Legislature
State Farm Automobile Insurance Co. v. Orlando, No. CV-23-0228-PR (Ariz. May 29, 2025)
Off-Road ATV · UIM Scope
Holds that Arizona law did not require UIM coverage for the off-road ATV accident before the Court.
In that circumstance, whether coverage existed was a matter of contract.
Official opinion · Arizona Supreme Court
Taylor v. Travelers Indemnity Co. of America, 198 Ariz. 310, 9 P.3d 1049 (2000)
UIM Gap Coverage
Applies § 20-259.01(G) and rejects a policy exclusion that would eliminate UIM protection beyond what
Arizona’s statutory framework permits in the circumstances before the Court.
Official opinion · Arizona Supreme Court
Cundiff v. State Farm Mutual Automobile Insurance Co., 217 Ariz. 358, 174 P.3d 270 (2008)
Workers’ Compensation Offset Rejected
Holds that workers’ compensation benefits are not liability insurance within § 20-259.01(G) and may not
be used as an additional statutory offset in calculating UIM coverage.
Verify case · Arizona Judicial Branch opinion resources
08 · Verification
Formal QC for an Arizona UM/UIM conclusion.
Statute QC
- Read the current version of § 20-259.01.
- Identify whether UM or UIM is actually involved.
- For UIM, confirm the subsection (G) damages-versus-liability-limit calculation.
- Check § 12-555 separately for claim-preservation deadlines.
Orlando QC
- Identify the vehicle involved.
- Determine whether it was required to be insured under Arizona’s Financial Responsibility Act.
- Determine where the accident occurred.
- Read the policy’s definition of uninsured or underinsured motor vehicle.
Policy QC
- Confirm the named insured and all persons qualifying as insureds.
- Confirm selected UM/UIM limits.
- Review exclusions against the statute and current cases.
- If multiple coverages exist, move to UM-030 rather than resolving stacking here.
Registry QC
- Tag Orlando to UM-020.
- Keep Franklin and Balzan primarily under UM-030.
- Keep Taylor and Cundiff as core UIM-benefit authorities.
- Clear the Orlando page-update flag only after this revision is published.
QC status:
A.R.S. § 20-259.01 and the official Orlando opinion were checked against current Arizona Legislature
and Arizona Supreme Court sources on Sept. 26, 2026. This revision is limited to UM-020 and does not alter
the separate UM-030 stacking framework.
09 · Questions
Questions that usually determine Arizona UM/UIM coverage.
Does Arizona require insurers to offer both UM and UIM coverage?
Yes. A.R.S. § 20-259.01 requires qualifying insurers to make the coverages available and offer them in writing to the named insured.
When does UIM coverage apply?
Under § 20-259.01(G), UIM applies when total applicable bodily-injury liability limits are less than the insured’s total bodily-injury or death damages.
Does UIM always follow the insured no matter what kind of vehicle caused the accident?
No. Orlando confirms that the threshold statutory motor-vehicle framework matters. The Court held that UIM coverage for the off-road ATV accident before it was not mandated by Arizona’s UM/UIM statute.
Can an insurer exclude every unusual vehicle from UIM coverage?
No general rule of that breadth follows from Orlando. The exclusion must be evaluated against the statute, the Financial Responsibility Act, the accident circumstances, and the policy language.
Can workers’ compensation benefits reduce Arizona UIM coverage?
Cundiff holds that workers’ compensation is not liability insurance under § 20-259.01(G) and cannot be inserted as an additional statutory offset from the UIM calculation.
What if more than one UM/UIM policy or coverage applies?
Continue to UM-030 — Stacking & Multiple Insurance Policies, which applies § 20-259.01(H), Franklin, and Balzan.
10 · Related Topics
Continue the Arizona motorist-coverage research path.
UM-030
Stacking & Multiple Insurance Policies
Use this when more than one UM/UIM policy or coverage may apply.
Coverage Interpretation
Policy Interpretation, Exclusions & Coverage Disputes
Use this when the dispute turns on policy wording beyond the UM/UIM statute itself.
AUTH-010
Arizona Case Authority Library
Verify Orlando, Taylor, Cundiff, Franklin, Balzan, and later Arizona decisions.
Research Maintenance
Current-law update completed · Orlando integrated
Canonical topic
UM-020
Change trigger
Orlando · May 29, 2025
Last formal source check
Sept. 26, 2026
Routine review cycle
15 days
Registry action
Page-update flag may be cleared after publication
Architecture test:
Orlando changed the scope analysis for UM-020, so this page was revised without altering UM-030 stacking,
claims handling, damages, settlement, or lien topics.
Research guide, not legal advice.
UM/UIM rights depend on the applicable statute, policy, insured status, vehicle, accident circumstances,
other available insurance, and claim deadlines. Confirm current authority and the complete policy before acting on a coverage conclusion.
Official Sources
Verify current Arizona law at the source
The detailed authority links above are preserved from the reviewed Arizona guide. Use current official sources and the operative policy before legal reliance.