Arizona State Specific Guide
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Arizona Overview |
| Time Zone | Underwriting, Cancellation and Non-Renewal Periods |
| Mountain Time Zone | The state's new policy underwriting period is 60 days. •New polices may be cancelled for any valid reason. •Non-Renewal: 30 days •Cancellation: 30 days; the insurer may only cancel for any reason only during the first 59 days that the policy has been in effect. |
| Prorate or Short-Rate Cancellation (Mid-Term) | Premium Increase Notices |
| The insurer may only apply customary short rate tables when cancellation is at the request of the insured and may only be pro-rated when cancelled by the company. | The carrier must give a 30-day notice of increase in premium. |
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Homeowners Line of Business |
| Special State-Specific Considerations | Over and Under Insurance |
| •The Colorado Plateau of northern Arizona is particularly prone to moderate-sized earthquakes as well as Yuma, Arizona, situated in the southwestern-most corner of Arizona, is at high-risk from powerful earthquakes from the nearby San Andreas Fault and its splay faults, the Imperial and Algodones faults. •Arizona is prone to flooding after wildfires. Wildfire alters the landscape in ways that increase water and mud runoff in burned areas. This circumstance is why it is important to have flood insurance in areas prone to wildfires. |
Per Statue 6-909; A mortgage broker shall not require a person seeking a loan secured by real property to obtain property insurance coverage in an amount that exceeds the replacement cost of the improvements as established by the property insurer. |
| Mortgagee-Bill Grace Period | State-Specific Homeowners Documents and Discounts |
| Lenders are required by law to make escrow account disbursements in a timely manner, on or before the due date to avoid a penalty, if the borrower’s payment isn’t over 60 days late. | None |
| Valued Policy State or Non-Valued Policy State | Unique Home Construction |
| Non-Valued Policy State | Typical home designs incorporate designs and materials to resist the intense sunshine and dry air found in all altitudes in Arizona. The most common exterior material used for Arizona homes in the deserts is stucco and roofing materials are tile. Most homes in Arizona do not have basements. |
| Residual Plans | Deductibles |
| Arizona does not have FAIR plan insurance or work with a joint underwriting insurance program; so, customers are urged to try to find coverage in the private market. | •Standard deductible commonly referred to as Base Policy Deductible can be in the amounts of $500, $1000 or $2500. •Deductibles for earthquake endorsements can vary widely -- anywhere from 2% percent of the home's value, up to 20%. |
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Auto Line of Business |
| Special State-Specific Considerations | Unique State Coverages and Laws |
| •An owner may register a qualifying vehicle for a five-year period in Arizona. •In Arizona, an inoperable vehicle can be “de-insured.” De-insurance is a method of temporarily not maintaining the required insurance on the vehicle until it is ready to be driven or placed on the road again. A de-insured vehicle will not be suspended due to lack of insurance unless it is driven on the roadways of this state. •Mexican law requires that separate liability coverage be purchased from a Mexican insurer before operating a vehicle in Mexico. Some carriers offer a limited mileage endorsement for travel to Mexico. |
Glass Coverage: The Insured has the option of purchasing a separate auto glass endorsement or waiver when they purchase auto insurance. If they have such an endorsement or waiver, they will not need to pay their full deductible when they have their windshield replaced. |
| Required State Limits | Special Automobile Insurance Policies |
| 15/30/10 | Arizona Automobile Insurance Plan (AZ AIP): The AZ AIP doesn’t write insurance policies itself but is an entity that assigns high-risk drivers to existing, licensed Arizona auto insurers. All auto insurers who want to do business in Arizona must participate in the plan. |
| Financial Responsibility | State-Specific Auto Documents, Discounts and Fees |
| The SR22 insurance minimum in Arizona is 15/30/10 for 36 months. | Each insurer issuing motor vehicle liability insurance policies shall pay to the Arizona Automobile Theft Authority a semiannual fee of 50 cents per vehicle insured under a motor vehicle liability insurance policy issued by the insurer. |
| Stacking of UM Coverages | Suspension Period |
| Stacking not allowed | Insurance is required immediately, before driving the vehicle. There is no grace period for proof of insurance. |