Most people can tell you what their insurance premium costs each month. Far fewer can tell you what their policy limits are. Those limits decide whether a serious claim gets paid in full or leaves you covering the difference out of your own savings, and they matter more than almost any other number on your policy.

At Riseson Insurance, an independent broker based in Tempe, we review policy limits with Arizona families every week, and low limits are the most common gap we find. This guide explains how limits work on both home and auto policies, what Arizona law requires, and how to choose limits that actually protect what you have built.

How policy limits work on every insurance policy

A policy limit is the maximum amount your insurance company will pay for a covered claim. Anything above that ceiling is your responsibility, no matter how large the loss is or how clearly it was covered.

Limits show up in different forms. Auto liability policies usually use split limits, with separate caps for injuries per person, injuries per accident, and property damage. Home policies assign a separate limit to each coverage section, from the structure itself to your personal belongings. Some coverages also carry special sub-limits, such as a cap on jewelry or electronics theft inside a homeowners policy.

Your deductible works on the other end of the claim. You pay the deductible first, and the insurer pays covered costs above it, up to the limit. Choosing limits is about deciding how much of a worst-case loss you can afford to absorb yourself.

Auto insurance limits in Arizona: what 25/50/15 really means

Arizona requires minimum liability limits of 25/50/15. That is $25,000 for bodily injury per person, $50,000 per accident, and $15,000 for property damage, according to the Arizona Department of Insurance and Financial Institutions.

Those numbers look reasonable until you compare them to real claims. The average bodily injury liability claim ran about $26,500 in 2023, per the Insurance Information Institute, which means a single typical injury claim can already exceed the state minimum per-person limit. A serious multi-vehicle accident on the Loop 101 or I-10 can pass $50,000 in medical bills quickly, and a totaled newer SUV can blow through $15,000 in property damage on its own.

Arizona is an at-fault state, so if you cause the accident, the amounts above your limits come from you. Roughly 12 percent of Arizona drivers carry no insurance at all, so matching your uninsured and underinsured motorist limits to your liability limits protects your own family from the same math in reverse.

Home insurance policy limits from the dwelling to loss of use

A homeowners policy is really a bundle of limits. Coverage A, the dwelling limit, should equal the full cost to rebuild your home at today's construction prices, not its market value or what you paid for it. Our guide to replacement cost insurance walks through that difference in detail.

Personal property coverage is typically set between 50 and 70 percent of the dwelling limit, and other sections follow their own percentages for detached structures and loss of use. The liability section of a home policy often defaults to $100,000, which is low for most Arizona homeowners. Raising it to $300,000 or $500,000 usually costs far less than people expect, and we explain why in our post on personal liability insurance.

How to choose limits that match your risk

The right limits depend on what you are protecting. Add up your home equity, savings, vehicles, and a rough sense of future income. That total is what a court judgment above your policy limits could reach.

A renter with few assets has different needs than a family with a paid-down home in Chandler and two incomes. As your net worth grows, minimum or default limits stop being a bargain and start being a quiet risk. For many households, the answer is higher liability limits on both policies plus an umbrella policy stacked on top. Our guide on when umbrella insurance is ideal to have covers how that extra layer works.

Review limits after major life changes too. A new home, a teen driver, a rental property, or a business on the side all shift how much protection you need.

The independent broker advantage on limits and pricing

Raising limits with one carrier can feel expensive because you only see that one carrier's price. Riseson Insurance is an independent Arizona broker, so we quote the same higher limits across multiple top-rated companies and let them compete. The gap between carriers for identical coverage is often larger than the cost of the limit increase itself.

Bundling helps too. Placing home and auto with the same carrier usually earns a discount on both policies, which can offset most or all of the cost of stronger limits. We break down the numbers in our post on bundling home and auto insurance in Arizona.

Frequently asked questions

What are the minimum car insurance limits in Arizona?
Arizona requires 25/50/15 liability coverage: $25,000 in bodily injury coverage per person, $50,000 per accident, and $15,000 in property damage, per the Arizona Department of Insurance and Financial Institutions. Uninsured motorist coverage is optional but must be offered.

What happens if a claim exceeds my policy limits?
You are personally responsible for the amount above the limit. An injured party can pursue your savings, home equity, and even future wages through a judgment. That exposure is the main reason higher liability limits and umbrella policies exist.

Should my uninsured motorist limits match my liability limits?
In most cases, yes. About 12 percent of Arizona drivers are uninsured, and uninsured motorist coverage is what pays for your own injuries when one of them hits you. Matching it to your liability limits keeps your protection consistent in both directions.

How much dwelling coverage do I need on an Arizona home policy?
Enough to rebuild your home completely at current construction costs, which have risen sharply in the Valley in recent years. Ask your agent to run a fresh replacement cost estimate rather than relying on a limit set years ago.

Get your policy limits reviewed today

If you have not looked at your policy limits in the last year, there is a good chance they no longer match what you own or what you earn. Riseson Insurance is an independent Arizona broker, which means we work for you, not for one carrier. We will pull quotes from multiple top-rated companies at the limits you actually need, walk you through what is covered, and find the bundling angle that saves the most. Reach out for a free Arizona home and auto policy review and see your options in one place.