Featured Expert
Cathy Chase
Cathy Chase, JD Advocates for Highway & Auto Safety View bio

This guide was written by

MoneyGeek Staff

Home to the Painted Desert and the Grand Canyon, Arizona is the perfect state to cruise by car. But it’s also a risky state for residents (and tourists) to drive in. Read on to see what Arizona requires for car insurance as well as expert advice on driving safely in the Grand Canyon State.

What’s Required for Vehicle Insurance in Arizona?

Summary

All vehicles, including motorcycles and mopeds, are required to carry liability insurance. Only about 10.6 percent of drivers lack vehicle insurance, lower than the median national average.

But the state is not as distinguished in road safety: it is one of the top 10 most dangerous states to drive in, according to data from the National Highway Traffic Safety Administration, and it gets bad marks for lax driving safety laws from Advocates for Highway and Auto Safety as well. “Unfortunately, Arizona received a red rating, which is the lowest rating in the report,” says Cathy Chase of Advocates for Highway and Auto Safety, which encourages road safety through better laws.

Among other things, Arizona does not require everyone in a car to wear seat belts. “The seat belt law is such a basic law,” Chase says. “Every state should have one in order to send messages to motorists and passengers that buckling up will save your life — maybe not in every crash, but it’s your first line of defense.”

Who Needs Vehicle Insurance in Arizona?

In Arizona, anyone owning a car registered in the state who plans on driving it must get liability insurance. If you plan to take the car out of circulation to fix or restore it, you can file a de-insurance certificate, which keeps the registration from being suspended.

Proof of Insurance

Arizona law mandates that drivers must carry evidence of “financial responsibility” within their vehicle, which typically comes in the form of an insurance card, car insurance policy or another method of proof (see “Alternatives to Insurance” below). There are two times that drivers may need to show proof of insurance: when a law enforcement officer requests to see it or after an accident.

If you’ve misplaced your card or policy, though, don’t worry: the state allows proof of financial responsibility to be shown to an officer via a wireless device, such as a smartphone.

Minimum Liability Insurance Requirements

In 1972, Arizona began requiring all drivers to carry $15,000 in liability insurance to pay for injuries during an accident. In 2016, the mandated amount remains the same. Unsurprisingly, experts think this number is much too low to truly cover the cost of an accident (See “How Much Vehicle Insurance Do You Need?” below). Here is the full scope of Arizona’s vehicle financial responsibility law:

  • $15,000 per person
  • $30,000 per accident
  • $10,000 for property damage

High-Risk Insurance Program

Arizona does not have a low-cost insurance program for drivers. If you are considered a high-risk driver because of your age or blemishes on your record, though, you can get insurance through the Arizona Automobile Insurance Plan (AAIP), which insures high-risk drivers. Try to find other insurance first, because these plans tend to be more expensive.

Alternatives to Insurance in Arizona

Arizona drivers don’t have to carry insurance — they just need proof of “financial responsibility.” For those drivers who eschew insurance, they can instead deposit $40,000 with the state treasurer, who will provide them with a certificate of deposit that must be carried in the vehicle.

Of course, given that only one state has lower minimum requirements than Arizona, neither a basic insurance policy nor the alternative — a $40,000 cash deposit — fully protects drivers in the case of an accident.

What Happens If You Don’t Have Car Insurance?

Don’t get caught without Arizona car insurance. Here’s what will happen:

  • The driver will be fined a minimum of $500 and her or his license will be suspended for three months.
  • Doing it again within three years will get the driver a $750 fine and a suspended license for six months.
  • Doing it a third time in that same three-year period will cost the driver at least $1,000, and she or he will have to go without a license for a year.

If you plan to temporarily cancel your insurance, you can submit a de-insurance certificate to the Motor Vehicle Division of the Arizona Department of Transportation (ADOT). Insurance companies in the state are required to inform ADOT in the event of insurance cancellation or nonrenewal, at which point the state will reach out to you to verify your insurance status.

If you find yourself with a suspended registration due to lack of auto insurance, you must first get insurance and then pay $50 to have your registration reinstated.

How Much Vehicle Insurance Do You Need in Arizona?

Arizona’s liability law was written in 1972. Vehicle and hospitalization costs have risen considerably since then, so it’s a good idea to consider purchasing a policy for more than the minimum. The standard industry recommendation is $100,000 for personal injury and $300,000 for accident coverage.

Percentage of Arizona drivers
That Lack Insurance
10.6% National Average: 12.6%

But that wouldn’t include collision and comprehensive insurance, which pays for the cost of repairs in case of a collision or damage caused by theft, break-ins or natural disasters. Both collision and comprehensive coverage are optional, meaning they won’t be found on cheap car insurance plans. Insurers recommend them for cars with a value higher than the deductible and several years’ worth of premiums.

Finally, even though only 10.6 percent of Arizona drivers are uninsured, getting into an accident with one of them can be costly. Uninsured motorist coverage is always a good idea, especially because it protects you from underinsured drivers.

Car Insurance and Special Groups

Teen Drivers in Arizona

Arizona teens using a graduated instruction permit to drive with adult supervision do not need to be added to an insurance policy. But once they’re driving on their own, they will need to be insured. You can help keep costs lower by raising the deductible, asking about a good student discount, enrolling your teen in a defensive driving class and letting her drive only a mid-sized sedan with advanced crash protection, according to the AAA. Insurers will likely charge more if your teen drives a sports car or SUV, since sports cars encourage speeding and SUVs may roll over in a crash.

Arizona has a graduated driver’s license system that allows kids to get a learners’ permit at age 15 and a full permit at 16½, but according to Advocates for Highway and Auto Safety, it needs significant improvement. The institute commended Arizona’s six month’s learner’s phase, but its members have encouraged the state to raise the driving age to 16, extend restrictions on teen drivers to age 17, and require 30 to 50 hours of supervised driving during the learner’s permit phase.

“The thought of a [licensed] teen getting behind the wheel while they’re just learning to drive is a recipe for disaster,” Chase says. “You don’t want teens driving at the most dangerous times. You want them gaining experience in the safest conditions.”

Arizona Car Insurance: How a Teen Affects Your Premium

Median annual price change for families with a teen driver on their policy:

$2,084 increase This is a difference of 161%.
Comparison of Premium Ranges
25th – 75th Percentile Median
Speed Warning

Average annual premium increase if your teen gets a speeding ticket while driving 11-15 mph over the speed limit:

Male teen

$410

Speedometer
Female teen

$357

Check Out Discounts for Teens in Arizona

Impact on annual premium with Good Student and Defensive Driving discounts:

$373 saved

Premiums from Arizona Insurance Providers

Do some comparison shopping: The annual average premiums for a married couple and a 16-year-old teen driver in Arizona vary wildly.

Insurance Provider Min MEDIAN MAX
Farmers $1,605 $3,086 $5,249
American Family $1,428 $3,386 $6,103
GEICO $1,504 $3,498 $7,349
Progressive $1,642 $3,762 $9,098
State Farm $1,918 $4,726 $10,503

Arizona Premiums: How Car Choice Affects Your Policy

Insurers consider sports cars a riskier choice for teens than sedans and minivans, since they’re associated with speeding. Here’s how car choice can affect your premiums.

Average premium for two 2014
Mustang GTs

$4,432

Average premium for two 2008
Town and Country Limiteds

$3,227

Annual benefit of minivans:

$1,205 saved This is 27% less expensive.
Premium Comparison for Two Adults + 16 Year Old
25th – 75th Percentile Median

College Drivers in Arizona

If you drive and are moving to another state for college, you have to notify your insurer about the move (even if you’re leaving the car with your parents). If you plan to drive on visits to Arizona, you may want to stay on your parents’ policy. If you’re planning to drive at college in another state, be aware that your policy has to match that state’s minimum requirements for insurance. If you’re not sure that it does, check with your insurer.

How Premiums Drop When Your Arizona Teen Goes to College

Median premium change with a college student vs. high school driver

$1,004 decrease This is a savings of 28%.
Comparison of Premium Ranges
25th – 75th Percentile Median

Annual Premiums: Compare These Arizona Insurance Providers

Each year, review your policy before it renews to see whether you could find a better deal somewhere else: The average premiums for a married couple with a 19-year-old college student in Arizona, for example, are very different.

Provider Min MEDIAN MAX
GEICO $657 $1,669 $4,586
Farmers $1,244 $2,386 $3,934
American Family $982 $2,386 $4,591
Progressive $1,306 $2,874 $5,982
State Farm $1,192 $3,018 $6,987

A Distance Discount for Arizona College Students?

Your insurer may give you a discount on your family premium if your student lives 150+ miles away from home.

Average premium for a 19-year-old male
  • $3,105 at home
  • $2,289 at school
  • $816 in savings
Average premium for a 19-year-old female
  • $2,691 at home
  • $2,125 at school
  • $566 in savings

College Students in Arizona: Savings on a Minivan vs. a Mustang

If your college student drives a minivan, it will cost less than if he or she drives a sports car. This is because sports cars are associated with speeding.

2014 Mustang GTs (2)

$3,005

2008 Town and Country Limited minivans (2)

$2,214

Annual benefit of minivans

$791 saved This is 26% less expensive.
Premium Comparison for Two Adults + College Driver
25th – 75th Percentile Median

Military Drivers in Arizona

More than 19,000 active duty military personnel and about 73,300 vets live in Arizona. Veterans there are exempt from paying vehicle registration fees, but that’s not all. Many insurance companies offer discounts to Arizona veterans and active-duty military on their car insurance ,with some selling policies exclusively to veterans, their spouses, and military families. Legacy, AFI and USAA are among the companies licensed in Arizona that cater to military personnel and veterans. Discounts are not automatic, though, as veterans still need to show a clean driving record for the best savings.

Comparing quotes is always a good idea, but active enlisted personnel will also want to check which insurance companies pause a policy if a vehicle is garaged during deployment. In addition, the local VFW will have information on insurance companies catering to veterans.

Arizona Service Members:
How the Vehicle You Choose Affects Your Premium

Rollover crashes are more common among SUVs and pickups, according to the Insurance Information Institute. But since sports cars are associated with reckless driving, an older model SUV will drive up your premium less than a recent model sports car.

Military Drivers: Comparison of Premium Ranges by Driver Age and Vehicle
25-Year-Old Driver
50-Year-Old Driver
25th - 75th Percentile Median

Age Savings for Arizona
Service Members

Median auto insurance
for service members:

$965
Male (25 yrs)$1,123
Male (50 yrs)$903
$220 savings
Female (25 yrs)$1,068
Female (50 yrs)$915
$153 savings

Compare Average Premiums Available to Arizona Military Personnel

To get the best rates, it pays to do some comparison shopping. Check out the average annual rates you can get in Arizona.

Premium Comparison for a Military Driver
25th - 75th Percentile Median

Seniors in Arizona

In Arizona, retirees are a growing segment of the state and already make up 27% of the population, according to U.S. census data. Even so, Arizona is not one of the 35 states that offer a senior discount on auto insurance for taking a state-approved defensive driving course. Most car insurance companies are willing to give you a discount if you take such a state-approved course, however, so shop around.

Undocumented Workers in Arizona

Arizona does not allow undocumented immigrants to get driver’s licenses, leaving car insurance out of reach for them as well. However, the federal government allows some undocumented immigrants to obtain driver’s licenses under the Deferred Action for Childhood Arrivals program, which applies to certain children who came to the U.S. before their 16th birthdays. The program is in a state of flux, check with the Citizenship and Immigration Services office to see if you qualify. Here are some of the basic qualifications:

  • You have lived in the United States since 2007
  • You were under 31 and without legal status by the end of that period
  • You came to the U.S. before you turned 16
  • You have a high school diploma, are currently enrolled in school, or served in a branch of the military
  • You do not have any felonies or serious misdemeanors

Ridesharing Insurance in Arizona: Are You Covered?

In 2015, the Arizona governor signed into law new regulations for ridesharing services. One of the main provisions of the law requires ridesharing companies such as Lyft and Uber to carry $250,000 worth of liability insurance for trips with passengers.

Though ridesharing companies now have insurance policies in line with the new state regulations, ridesharing drivers should read the fine print to make sure they are covered when passengers are not in the car. Your personal car insurance policy will likely not protect you if you are “driving for hire.” Rideshare drivers (and passengers) can cover their bases by talking with their insurance agent to make sure they’re fully covered in the event of a crash.

Car Accidents: How to File a Claim in Arizona

No one wants to get in an accident, but they happen every day: in fact, 300 times a day in Arizona. The state’s driver manual outlines the steps you should take if you get in an accident that doesn’t require immediate hospitalization:

  • Help care for injured parties
  • Exchange license and insurance information with other drivers in the accident
  • Get information from witnesses
  • Call the police if there is an injury

Failure to follow theses steps can result in anything from a suspended license to prison time. After an accident, call your insurance agent immediately to discuss how to move forward with a claim.

Best and Worst States for Drivers: How Does My State Rank?

Arizona has the unfortunate distinction of being in the top 10 for the highest rate of traffic fatalities per mile traveled, according to data from the National Highway Traffic Safety Administration. In 2013, the last year statistics were available, 849 people died on Arizona’s roadways. Eighteen percent of them were motorcyclists — one of the highest proportions of motorcycle-related traffic fatalities in the country. “Arizona is lacking an all-rider motorcycle helmet law,” says Chase of Advocates for Highway & Auto Safety. “That’s a huge deficit. States that don’t have an all-rider law have more fatalities than those that do.”

Arizona Driver Safety Ranking

49th in the U.S.
About Our Data

The driver safety table shows the different safety factors that contribute to your state's overall safety rank (in the green box). The overall safety ranking and the National Ranking column scores in each category (including crash fatality rates) are from safest to most dangerous, with 1st being the safest and 51st the least safe.

How did we create the safety rankings?

We created a traffic safety ranking of all US states plus the District of Columbia by combining data from the National Highway Traffic Safety Administration and the Insurance Institute for Highway Safety. We looked at fatality rates by distance traveled as well as by population and gave more weight to behaviors that were riskier and preventable (i.e., drunk driving, not using a seat belt), as well as to accidents that involved more than one party (i.e., multi-vehicle).

Driver Safety Profile Number of Fatalities Fatality Rate

The fatality rate is the rate per one billion vehicle miles traveled, except for pedestrian and bicyclist fatality measures, which are per measured per a population of 100,000.

Ranking
(National)

Rankings are in order of safest to least safe. A state with the lowest fatality rate would be the safest, and thus ranked #1.

Drunk Driving-Related Fatalities 221 3.64 37th
Speeding-Related Fatalities 290 4.79 43rd
Passenger Vehicle Unrestrained Fatalities 227 3.75 29th
Unhelmeted Motorcycle Fatalities 83 1.37 46th
Multiple Vehicle Fatalities 350 5.78 41st
Pedestrian Fatalities 151 2.28 46th
Bicyclist Fatalities 29 0.44 50th
Total Vehicle Fatalities 849 14.01 42nd

Sources: National Highway Traffic Safety Administration, Insurance Institute for Highway Safety

Arizona: Protecting You from Injury on the Road

The Grand Canyon State’s motorist laws are relatively laissez-faire, with few requirements involving cell phones or universal seat belt and motorcycle helmet use, according to Advocates for Highway and Auto Safety. Traffic fatality rates in Arizona also crept up 2 percent between 2012 and 2013, the last year for which federal data is available.

Safe Driving Laws – Arizona

  Requirement State Law Details
Mandatory seat belts Partial Drivers and front-seat passengers must wear seat belts; passengers between the ages of eight and 15 must wear seat belts in both front and back. People 16 and over in the back seat are NOT required to wear seat belts.
Child passenger safety Children under eight must wear child restraints, except for five- to seven-year-olds taller than 57 inches
Driving under the influence (DUI) The legal blood alcohol content limit is 0.08 (0.04 for commercial truckers). Penalties are severe; for the first offense, you will serve 10 consecutive days in jail, pay a $1,250 fine, and do community service; for the second offense, you will spend three months in jail, be fined $3,000, have your license revoked for a year, and do community service.
Ignition interlock after DUI Mandatory upon conviction.
Talking on cell or texting while driving Partial Prohibited only for bus drivers
Protections for young drivers New drivers cannot drive between midnight and 5 a.m. and are limited to one non-family passenger for the first six months
Motorcycle helmet law Partial Riders under 18 must wear helmets. Universal helmet law was repealed in 1975.
Bicycle helmet law No statewide law

Sources: Governors Highway Safety Association and National Highway Traffic Safety Administration

Car Insurance Resources for Arizona Residents

Arizona Automobile Insurance Plan

High-risk drivers need car insurance, too. The Arizona Automobile Insurance Plan is available for drivers who cannot find coverage on their own.

Arizona Department of Insurance – Consumer Affairs Division

Arizonan drivers can use this website to do four things: report insurance fraud, read about state laws on insurance, see which insurers have been disciplined, and file complaints about insurance companies.

Arizona Department of Transportation – Motor Vehicle Services

Look for answers to insurance questions on the FAQ page of ADOT’s website.

Arizona Driver License Manual and Customer Service Guide

Published by ADOT, the manual explains state insurance and license requirements.

Office of the Arizona State Treasurer

Drivers opting to hold certificates of deposit in lieu of insurance can find the necessary forms and information here.

Updated: July 29, 2017