In the world of car insurance, news of a rate decrease is always a welcome relief. For many drivers in Arizona, navigating the landscape of premiums and policies is a constant challenge. Fortunately, there’s positive news on this front: American Family is planning to lower its auto insurance premiums in the state.
American Family Insurance, Arizona’s 7th biggest auto insurance carrier, was recently approved to decrease its auto insurance rates by 2%. The rate change is scheduled to take effect for renewal business starting on September 1, 2025, impacting an estimated 61,503 policyholders. This will decrease total written premiums across the state by over $4 million, translating to an approximate saving of $68 per policy.
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Why Do Auto Insurance Premiums Change?
When it comes to insurance premiums, increases and decreases are two sides of the same coin. Car insurance rates constantly adjust based on a multitude of factors. So, while American Family’s rates are decreasing, other insurers may be moving in a different direction.
Here’s a look at the factors that typically lead to rate changes:
- Inflation and Repair Costs: The cost of repairing vehicles is a major driver of insurance rates. When the price of auto parts, labor, and even the high-tech components in modern cars rises, so does the cost of paying a claim.
- Accident Trends: A decrease in the frequency or severity of accidents in a particular region can lead to lower rates. Conversely, if there are more accidents or more severe ones, premiums may increase.
- Weather and Catastrophic Events: States like Arizona can be prone to specific weather events like dust storms and monsoons, which can lead to a surge in weather-related claims. A period with fewer of these events could contribute to a rate decrease.
- Operational and Business Costs: An insurance company’s own financial health and efficiency also play a role. When a company finds ways to streamline operations or manage its costs more effectively, it can sometimes pass those savings on to its customers.
How to Maximize Your Savings on Car Insurance in Arizona
Even with a rate decrease from a major insurer, this is an excellent opportunity for all Arizona drivers to review their policies and ensure they are getting the best possible deal. Finding affordable car insurance in AZ is an ongoing process, and a little effort can go a long way. Here are some warm and professional suggestions on how to save on your policy:
1. Always Shop Around for Quotes
Even if you’re happy with your current provider, a rate change from one company is the perfect time to get new quotes. Other insurers might be offering even more competitive rates, and you could find a policy that saves you more money. Use online quote comparison tools to gather a variety of quotes and narrow down your list from there.
2. Re-evaluate Your Coverage and Deductibles
Take a moment to review your policy and assess your needs. For older cars that are fully paid off, you might consider adjusting your collision and comprehensive coverage. Another option is to increase your deductible– the amount you pay out of pocket before your insurance kicks in. A higher deductible typically results in a lower monthly premium. Just be sure you have an emergency fund to cover that amount if you need to file a claim.
3. Ask About Every Possible Discount
Many drivers don’t realize how many discounts they might be eligible for. Call your insurance provider and ask for a complete list of their deals. You may qualify for savings through:
- Multi-Policy Discount: Bundling your auto and home or renters insurance with the same company.
- Good Student Discount: For young drivers who maintain a high GPA.
- Safe Driver Discount: For a clean driving record with no at-fault accidents or traffic violations.
- Vehicle Safety Features: For cars equipped with anti-lock brakes, airbags, or anti-theft systems.
- Low Mileage Discount: If you don’t drive your car often.
- Telematics Programs: These programs use a mobile app or a device to track your driving habits and reward you with a discount for safe driving.
4. Maintain a Strong Credit Score
In Arizona, as in many other states, your credit score can be a factor in calculating your insurance rate. A good credit score can signal financial responsibility to insurers, which can lead to a lower premium. By paying bills on time and managing your debt responsibly, you can help improve your credit score and potentially save on your insurance.
5. Consider Your Vehicle Choice
The type of car you drive significantly affects your insurance rate. Insurers look at a vehicle’s repair costs, its safety ratings, and its likelihood of being stolen. A vehicle that is less expensive to repair and has a strong safety record will generally have a lower insurance premium.
Find Savings that Last
The news of American Family’s rate decrease is a positive development for its Arizona policyholders. For everyone else, it’s a friendly reminder to ensure you’re getting the best value for your coverage.
Next time, don’t wait to find out about an upcoming rate change. Sign up for Auto Quote Tracker to get free alerts when your premiums are set to go up or down– before your renewal letter.
