Arizona can be a dangerous state to drive in especially with the dust storms and flash floods, which makes it very important to have good car insurance. Arizona car insurance laws are put in place to maintain and promote safety on the roads. If you’re a new driver in the state, it’s essential to understand that you must carry the minimum insurance to drive on public roads. That means taking your time to understand car insurance requirements in the Grand Canyon State and getting adequate coverage to protect yourself and your loved ones. Let’s look at Arizona car insurance laws in detail.
Car Insurance Minimum Requirements in Arizona
Like most states, Arizona requires all motor vehicle drivers to carry a certain amount of car insurance as proof of financial responsibility in the event of an accident. Failure to do so can result in penalties, license revocation, or even jail time. To meet the state’s mandatory insurance requirements, you need to have:
Bodily injury liability: If you’re at fault, you will cover the limits to $15,000 per injured person and $30,000 for two or more injured persons in the accident. Bodily injury liability also covers legal fees if the other party decides to sue you. However, your insurance company will only pay up to the stated limit.
Property damage liability: Provides $10,000 compensation for property damaged due to an accident, provided that you are at fault. This can cover everything from the other driver’s car and other properties such as fences, poles, and buildings.
The minimum liability coverage may not be adequate to cover damage or loss, especially if the accident involves multiple cars. You may want to ask your insurance company to increase limits and supplement liability with other optional coverages.
Related: State Minimum Car Insurance
Optional Car Insurance Coverage in Arizona
Liability coverage helps you pay what you owe to another driver if you are at fault in an accident. However, you’re still exposed to other risks, such as theft that could leave you financially exposed. For instance, if you get injured in the same accident, you will have to find more money to pay your medical bills and repair your car. That’s where optional insurance coverage comes in. Here are a few optional coverages you can add in Arizona.
Collision: Covers damages caused to your vehicle due to a collision with another object such as a tree, pole, building, rock, animal, or even another vehicle.
Comprehensive: Covers any loss or damage to your vehicle not collision-related such as theft, vandalism, hail and storm damage, fallen tree, and other natural hazards.
Uninsured / Underinsured Motorist (UM/UIM): Pays your medical bills if you’re involved in an accident with an uninsured or underinsured motorist.
Personal injury protection or medical payments: Pays for your medical expense in case you’re injured in an accident that you cause.
Related: Does Liability Insurance Cover Theft?
Arizona Car Insurance Premiums
The Arizona Department of Insurance regulates vehicle insurance premiums. The state allows insurance companies to award discounts and charge premiums based on the following factors:
- Your age and gender
- The type of vehicle you’re insuring
- How often you drive
- Your driving history or driving experience
- Your location
- Your driving record
- Your marital status
- How long you’ve been driving
- How you intend to use the insured vehicle
You will likely pay lower premiums if these factors go in your favor. For instance, a teenager with no driving experience or skills will pay more than a middle-aged married man. Similarly, you will pay more if you live in an area with high crime rates. Arizona also allows insurers to consider your credit history when calculating your premiums.
Related: Everything You Need to Know About SR-22 Insurance in Arizona
What is the Alternative Proof of Financial Responsibility in Arizona?
The Arizona Motor Vehicle Davison (MVD) allows you to prove your financial responsibility on public roads by depositing $40,000 in securities or cash. The state treasurer will verify that you have no prior unsatisfied judgments against you before awarding a certificate of deposit. When stopped by a traffic officer, you can use this certificate as proof of insurance. Remember that the state will use this money to pay the other driver if you cause an accident. If the amount is more than $40,000, you will pay the rest out of pocket or face a lawsuit.
What Penalties for Failure to Carry Arizona Auto Insurance
You must present your proof of insurance when a traffic police officer stops you. The Arizona government may suspend your driver’s license or vehicle registration if you don’t have car insurance. For a first-time offense, you will pay a fine of $500 and suspension of your license for three months. Repeated offenses carry heavier fines and suspensions. The government will charge storage and towing fees if you drive without insurance and cause an accident.
Related: Cheap Car Insurance Arizona
How to Lower Your Car Insurance Premiums in Arizona
It’s possible to lower your auto insurance premiums. Here are a few tips to guide you:
- Buy all your insurance policies from the same insurance companies to get discounts.
- Compare quotes before making the final decision.
- Check if you qualify for any low-cost auto insurance program the state may offer.
- Invest in tools and software that help improve you and your vehicle’s safety.
- Older drivers with excellent driving records qualify for retirement discounts.
- Enroll in driving school to improve your driving skills and get a certificate. Your insurance company will consider the certificate when awarding premium amounts.
- Work on your credit score before purchasing your insurance policy.
- If you are a teen driver, consider joining your policy with your parents instead of buying separately, which can be costly.
Final Thoughts
Arizona uses the “fault” system to hold every driver accountable for causing pain, injuries, vehicle damage, and any other loss related to an accident. The minimum liability may not be adequate to cover the loss. That’s why it’s prudent to increase your liability premiums and add optional coverage to protect yourself financially. Your primary auto insurance covers you, your family members, and any other driver you authorize to drive. Don’t forget to check and compare quotes from various insurance companies to get the best deal.

At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.