Ariz. Auto Insurance Regulators Adjust Price Threshold for Non-Renewal of Policies

The price threshold that property damage liability claims must meet for an insurance company to non-renew coverage for a policyholder in Arizona has been raised to $2,400.

State regulators reassess the threshold every year and adjust it according to changes reflected in the Bureau of Labor Statistics Consumer Price Index.

Arizona Property Damage Thresholds, 2000-11

Click table to enlarge

Most Arizona consumers are likely unaware of the existence of this particular consumer protection that was first established around 2000.

Although the filing of claims that result from an accident caused by the policyholder can push up that policyholder’s rates, this piece of regultion has made it so that a driver must have established a seriously risky driving history in order for an insurer to discontinue coverage.

According to the regulatory statute, a driver must have had three at-fault property damage claims that exceed $2,400 during a three-year period in order for an insurer to legally non-renew coverage because of the frequency and severity of claims filed. Such a track record would be an indication that a driver belongs in the high risk auto insurance pool.

The Insurance Information Institute has reported that the average property damage claim severity in 2009 was $2,873, and that approximately 3.5 claims were filed for every 100 cars insured that year.

Other reasons that Arizona coverage providers can refuse to renew a policy include fraudulent misrepresentation at the time of purchase of a policy, suspension or revocation of a license during a policy period or being convicted of any of a number of reckless driving infractions.

About John Pirro
John Pirro is a licensed fire and casualty insurance agent specializing in various aspects of the auto insurance industry. He worked in the auto body repair industry before taking a reporting position at Online Auto Insurance News.

No comments yet.

Comment on this article