Arizona auto insurance costlier

2013-11-18T00:00:00Z Arizona auto insurance costlierBy Russ Wiles The Arizona Republic Arizona Daily Star
November 18, 2013 12:00 am  • 

Drivers in Arizona pay slightly more than average in auto-insurance costs, but premiums here have been rising more slowly than in most other states.

Those are some of the findings from a newly released Consumer Federation of America study — which also showed Arizona is a profitable place for insurers to do business.

Arizona didn’t stand out as especially unusual in any of the key measures of vehicle coverage. Average premiums here of $804 for 2010, the most recent year examined for that measure, were above the U.S. average of $791.

But over the 21-year study period, premiums in Arizona rose a modest 38 percent — the 10th-lowest rate of increase and less than the U.S. average of 43 percent.

California was the only state where average auto-insurance costs declined, however slightly, over the study period, due to tougher regulations imposed there in 1988. At the other extreme, average premiums in Nebraska surged 108 percent.

The study also found Arizona to be a relatively profitable state in which insurers could do business. Companies operating here earned an average profit margin of 9.9 percent, compared with a national average of 8.6 percent.

Arizona is a “file and use” state, where insurers must file their rates but aren’t required to have state approval to implement them. Fully deregulated states, where insurers don’t need to file or have their rates approved, showed the highest average increases.

Among negative factors that can push up Arizona auto-insurance premiums are the relatively high cost of auto repairs here and the percentage of car thefts per 1,000 vehicles.

Also, more Arizonans live in urban settings — another factor that can drive up premiums because of the increased potential for collisions or thefts. Conversely, per-capita income is a bit lower in Arizona, which can temper rate increases.

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