Auto Insurance Cost

The car insurance premiums that motorists pay for car insurance rose by roughly 33% from 2010 to 2016. These rising costs continue to put pressure on those with limited financial resources. The Insurance Institute for Highway Safety is a research organization that gathers and analyzes insurance data. Their data shows that automobile insurers currently pay around $900 annually in insurance claims for each vehicle that they cover. It is helpful for consumers to understand the various factors that insurers consider when calculating rates. Not all insurance companies use the same formula for determining rates. Most include factors such as the type of insurance coverage, your driving record and the vehicle you drive. It is best to work with an experienced insurance agent who will shop multiple carriers to find you the best cost for your needs.

Arizona Rates on the Rise

A recent ABC15 News report indicates motorists in Arizona have experienced a 30% increase in the rates of car insurance over the past four years. Much of the increase is attributed to the addition of many new technical safety features. Newer cars are increasingly equipped with cameras, sensors and other on-board electronics that may be costly to replace. Janet Ruiz of the Western Insurance Information Institute believes that as more drivers purchase newer cars with these safety features the reduction in accidents should stabilize prices.

Minimum Requirements

Arizona law requires drivers to maintain the following minimums in automobile liability insurance coverage (15/30/10):

  • $15,000.00 in bodily injury coverage for any individual
  • $30,000.00 in bodily injury coverage for all individuals injured in a single accident
  • $10,000.00 in coverage to compensate for property loss and damages

Recent Arizona Legislative Action

These minimum requirements have stayed the same since they were implemented in 1972. Earlier this year, state legislators voted to increase the minimum amounts of required car insurance for all motorists. Governor Doug Ducey vetoed the measure that would have led to a large increase in auto insurance rates to reflect the new 25/50/25 requirements. Ducey said that he had concerns that drivers would be unable to afford the premiums for providing the higher coverage.

Current Average Costs

In the U.S., the annual average cost of car insurance is $1,503. Drivers in Michigan pay the highest rates and those in Ohio enjoy the lowest average rates. The following table shows the annual average that is spent on car insurance in Arizona and all bordering states:

ArizonaCaliforniaColoradoNevadaNew MexicoUtah
State Yearly Averages[1]$1,222$1,982$1,558$1,388$1,371$1,192
Difference  (+/-)+39%+22%+12%+11%-3%

[1] https://www.businessinsider.com/average-cost-car-insurance-in-every-state-ranked-2018-3

Types of Automobile Coverage

Liability (Bodily Injury/Property Damage)

These forms of coverage are mandatory for all those operating a motor vehicle with the “15/30/10” minimum previously discussed. They apply exclusively when you are deemed as “at-fault” in an accident. Bodily injury coverage is liability insurance used to pay for costs such as medical expenses and lost wages for those injured. Property damage liability is used to repair or replace someone’s vehicle or other physical damage caused.

Collision

Collision coverage is used to repair or replace damage that occurred to your vehicle. It applies whenever your vehicle strikes any moving or fixed object. When someone leases or finances a vehicle purchase, the lender will require this coverage for their own protection. Keep in mind that this type of coverage will become more costly when insuring higher-end luxury vehicles.

Comprehensive

This applies when your vehicle is damaged or lost as a result of a reason other than a collision. Some of the common reasons include theft, fire or vandalism. Comprehensive coverage claims were rampant this past year in the regions hit hardest by hurricanes. Both collision and comprehensive coverage typically will include a deductible amount. The deductible is a predetermined amount that the insured party must pay before the insurance begins paying. Some of the common deductible amounts are $500.00 and $1,000.00. Those who have a larger deductible are likely to save money on premium costs. Drivers who maintain comprehensive and collision coverage are referred to as having “full coverage”.

Uninsured/Underinsured Motorist

Unfortunately, some drivers on the road choose to break the law by operating a vehicle without the required liability coverage. This type of coverage may also apply when you are involved in an accident with a “hit-and-run” driver. Underinsured coverage is used when the damages in an accident exceed the maximum limits of the at-fault driver’s liability insurance. The minimum amount of coverage that may be offered by insurers is equal to the state’s minimum liability requirements.

Medical Payments

“Med” coverage is generally considered a supplemental type of insurance. The coverage is used specifically for medically-related expenses that result from a vehicle accident.

Prior Driving Record & History of Claims

Car insurance providers consider your driving history when assessing you future likelihood of collisions and claims. Insurers generally can access a database that shows your history of previous insurance claims for the past seven years. They will also look at your recent driving record to see if you have caused any accidents or been cited for violations. Those with a clean driving record and claims history are going to enjoy lower insurance premiums.

Your Location

Where you are located has some influence on the amount you will pay for car insurance. Those who use their vehicle for work purposes may be at greater risk for an accident. Other geographical considerations may include whether you live in a rural area or a busier, urban area. Insurers may use statistics such as the rates of vehicle theft in your area to identify risk factors.

Demographics (i.e. Age, Gender)

Automobile insurance companies increasingly use detailed analytics based on a variety of characteristics to determine car insurance prices. Some of the more common factors used for assessment include the following:

  • Younger drivers (under 25 years old) are more likely to be involved in traffic accidents.
  • Teenage drivers are less experienced and are more likely to exhibit risky behavior.
  • Women generally have lower premiums compared to men.
  • People who are married tend to have lower premiums.

Credit History

Insurers do commonly factor in your credit score when calculating premium rates. Data has shown that those with higher credit scores tend to be involved in fewer accidents. A University of Texas research study found that “poor credit history strongly relates to insurance losses in the automobile insurance industry”.

Affordable Car Insurance Rates in Casa Grande

How important is it to have sufficient automobile insurance coverage? It is critical that you are adequately protected considering that last year in Arizona there were over 127,000 vehicle crashes. The Gebhardt Insurance Group is a local insurance agency committed to finding you a car insurance solution that is a perfect fit for your needs. We work with dozens of highly rated auto insurance companies. Our team will find you the best coverage to fit your needs at the best rate possible. We will gladly assist you with insurance for motorcycles, recreational vehicles and boats as well. Contact us today for a quote at (520) 836-3244.

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Steve Gebhardt

Gebhardt Insurance Group was honored by AAA Insurance for being the top New Policy Agency in Arizona for 2013 and achieving the "Emerald Achievement Award."

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