Car insurance in Phoenix, AZ: Cheapest insurance and average rates

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Car insurance in Phoenix costs $2,251 per year for full coverage – $188 per month. In 2024, Geico offers the cheapest car insurance policy at $132 per month.

Phoenix, the capital city of Arizona, boasts a population of more than 1.6 million, making it the most populous city in the state. In this sprawling metro area, which includes Mesa and Chandler, drivers lose 57.2 hours per year to commuting in traffic, putting it in the top 50 longest commutes in the nation.  

As an Arizona driver, car insurance is required. Learn about Phoenix’s cheapest car insurance companies and how much car insurance you must carry.

How to find the best car insurance in Phoenix

Finding the best car insurance in Phoenix involves comparing quotes from multiple insurance companies. As you look for the best option, get quotes from at least three auto insurance companies to find the right fit. Also, don’t forget to ask about any discounts you might qualify for to keep costs low. 

The cheapest car insurance company in Phoenix

According to 2023 data, Geico offers Phoenix drivers the cheapest car insurance rates at $1,582 per year. Other insurers offering relatively cheap average rates and open to all include USAA, Travelers and Auto-Owners. USAA is only available to military members and their families. 

The table below illustrates the different average costs by insurance company for state minimum vs. full coverage policies.

How much is car insurance in Phoenix per month?

Phoenix drivers pay an average of $56 per month for a car insurance policy that meets the state’s minimum requirements. Drivers seeking more protection through a full coverage policy pay an average of $188 monthly for insurance. 

The table below breaks down the average monthly car insurance rates by type of policy for Phoenix drivers.

How do rates in Phoenix compare to other large cities in the U.S.?

Insurers look at your location when calculating your auto insurance premiums. In general, drivers in big cities pay more for car insurance than rural or small-town drivers. That’s because bigger cities have more risk factors, including higher rates of vandalism, theft, and accidents. Insurance companies compensate for the higher risk with higher insurance premiums. 

James Brau, professor of finance at Brigham Young University, says that the more risk the insurance company must bear, the higher the premium they must charge to stay in business and make a profit. 

“Large cities tend to present more risk to the insurance companies than rural areas. Large cities have more people, more cars and higher chances of getting in wrecks or having other damage done to vehicles,” Brau says. “As such, insurance firms must charge higher premiums in cities. Cities that are relatively more dangerous, in turn, must charge higher premiums than cities that are not as risky. Insurance companies study damage losses per metropolitan area and assign premiums depending on the number of wrecks in an area.”

See how much drivers pay for car insurance in several major U.S. cities compared to Phoenix in the table below.

Here’s what you need to know when driving in Phoenix, AZ

Driving in Phoenix isn’t always straightforward or efficient. But preparation can make for a smoother journey. Here are some tips to help you navigate the city of Phoenix:

• Traffic can be unpredictable. Consider using a map app to get directions and avoid unnecessary traffic. 
• Congestion peaks between 6 and 9 a.m. and 3-6 p.m. on weekdays. Try to avoid rush hour traffic if possible. 
• Get comfortable with the complex freeway system to avoid getting lost or missing your exit. 

As you navigate the streets of Phoenix, keep these driving rules in mind:

• If a highway is divided into two or more separate roadways and traffic is restricted to one direction upon each roadway, no one can stand or park a vehicle other than on the righthand side of such one-way roadway unless signs are erected to permit such standing or parking elsewhere.
• No one can park or permit to be parked on any residential property a vehicle that is inoperable and is visible from beyond the boundary of the lot.
• No person can stop, stand or park a vehicle in an alley at any time except for the loading or unloading of physically disabled persons or for the expeditious loading or unloading of goods, materials or merchandise. Loading or unloading must be accomplished without blocking the alley to the free movement of vehicular traffic and without interfering with or obstructing the use of a fire escape. 

How much car insurance do I need in Phoenix?

Phoenix drivers are required to carry a minimum amount of coverage, which is set by the state of Arizona. Below is a breakdown of the minimum coverage you’ll need to carry when driving in Phoenix:

• $25,000 in bodily injury liability coverage per person 
• $50,000 for bodily injury liability coverage per accident for all injured parties.
• $15,000 in property damage coverage per accident. 

The requirements outlined above represent the bare minimum. Many drivers choose to pay for more coverage for better protection. For example, drivers who want help repairing or replacing their vehicle after an incident might choose to pay for collision and comprehensive coverage. 

Average cost of car insurance in Phoenix

Phoenix drivers pay an average of $676 per year for a bare-bones policy that meets the state’s minimum requirements. Drivers who opt for the protection of a full coverage car insurance policy pay an average of $2,251 per year.

Nationally, drivers pay an average of $1,895 annually for a full coverage policy. That’s about $300 per year lower than the cost Phoenix drivers face. In contrast to the rest of Arizona where drivers pay an average of $1,812 for a full coverage policy, Phoenix drivers pay higher rates.

How much does car insurance in Phoenix cost with violations?

Traffic violations tend to increase your car insurance costs. After all, a traffic violation is a red flag to insurance companies, which they compensate for by increasing your premiums. 

Arizona drivers see car insurance costs increase by an average of 42% after a speeding ticket, by an average of 65% after an at-fault accident, and by 99% after a DUI conviction.

Cheapest car insurance in Phoenix by age

Insurance companies take your age into account when determining insurance premiums. Younger drivers tend to face higher car insurance premiums due to a lack of experience behind the wheel, which is a risk factor. As you build your driving experience over time, you’ll see car insurance rates fall. 

The table below highlights the trend of younger drivers paying more for car insurance in Phoenix.

Compare auto insurance rates in Phoenix by ZIP code 

Within Phoenix, your location can have a big impact on your car insurance costs. ZIP codes associated with shorter commutes and lower crime rates tend to find cheaper car insurance premiums than those with longer commutes and higher crime rates. 

We explore both ends of the spectrum below.

Cheapest annual car insurance rates in Phoenix, by ZIP code

Most expensive annual car insurance rates in Phoenix, by ZIP code

Our recommendations: Car insurance for drivers in Phoenix

Car insurance is an unavoidable expense for Phoenix drivers. But the good news is that you don’t have to overpay for this necessity. Get quotes from multiple car insurance companies to find the most affordable rates for your unique situation.  

A full coverage insurance policy with liability limits of 100/300/100 is the best option for most drivers. Consider increasing your liability limits as you accumulate wealth and your net worth increases. Purchasing as much car insurance as you can afford will give you peace of mind as you navigate the roads of Phoenix.

What our expert says

Q. Why do insurance rates vary from city to city?

Dr. James BrauJoel C. Peterson Professor of Finance Brigham Young University

“Large cities tend to present more risk to the insurance companies than rural areas. Large cities have more people, more cars and higher chances of getting in wrecks or having other damage done to vehicles. As such, insurance firms must charge higher premiums in cities. Cities that are relatively more dangerous, in turn, must charge higher premiums than cities that are not as risky. Insurance companies study damage losses per metropolitan area and assign premiums depending on the number of wrecks in an area.”

Resources & Methodology

Sources

• Census Bureau. “Phoenix Quick Facts.” Accessed January 2024.
• CoPilot. “Cities That Lose the Most Time in Rush Hour Traffic.” Accessed January 2024.
• Insurance Information Institute. “What determines the price of an auto insurance policy.” Accessed January 2024. 
• City of Phoenix. “Municipal Code.” Accessed January 2024.
• Arizona Department of Insurance and Financial Institutions. “Minimum Coverage Required for Arizona Drivers.” Accessed January 2024.
  Insurance Information Institute. “What is covered by a basic auto insurance policy.” Accessed January 2024.

Sarah Sharkey

Contributing Researcher

 

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Sarah Sharkey is a personal finance writer with a master’s degree in management from the Hough School of Business at the University of Florida. She enjoys helping readers find money solutions that work. She has written for numerous personal-finance publications including Money Under 30 and The College Investor.