Commonwealth Casualty Company submitted a request to the Arizona Bureau of Insurance to increase the premiums for its auto insurance customers in the state by an average of 15.3%.The filing was approved as of August 18, 2017.
Policies written for new customers will have been affected by the change on or after July 15, 2017. The rate impact will have been enacted for current policyholders on or after August 15, 2017, should they choose to renew.
Commonwealth has stated in the rate filing that the changes stem from the company finding a series of loss trends, and follows the continuation of certain rate changes. This change was filed after June 30, 2017 after a review of loss and premium data was conducted, which is also how the rate change was calculated.
Commonwealth Casualty Company proposed rate impact
Premiums are estimated to increase for 24,201 policyholders in Arizona by an average of $152 per policy. As with most increases, though, the impact will be spread unevenly, with some policyholders receiving increases lower than that figure and other receiving larger hikes. In percentage terms, the company reports the proposed rate changes will range from a decrease of 16.0% to an increase 37.5%.
As of 2016, Commonwealth ranked 22nd among auto insurance carriers who are active in the state. The Arizona auto insurance market is not heavily concentrated. State Farm, while commanding more of the market than any other carrier, still holds only 17.4% of all policies.
How these increases compare
These hikes are among the highest rate increases to go into effect for auto insurance in Arizona in 2017. Among the 12 largest companies in the state, 11 have been approved for rate changes by regulators. The average increase in premiums arising from those decisions is 5.7%. Within the approved list, the largest hikes were for California State Auto Group (with an average increase of 9.5%); Berkshire Hathaway Group (8.0% on average); and Nationwide Corporation Group (7.5% on average).
When compared to the rest of the U.S., car owners in Arizona enjoy some of the cheapest auto insurance. Premiums are 19% less expensive than the average premiums for car owners in the country as a whole, with Arizona policyholders facing an average annual fee of $1,222 to insure their cars.
That annual tab translates into an average monthly cost of $102, which makes Arizona the 14th cheapest state for auto insurance in the U.S. Arizona's neighbors, California and New Mexico, are on the more expensive end of the spectrum, paying an average of $164 and $114 respectively. However, just to the north of Arizona is Utah, where car owners enjoy the 11th cheapest premiums in the nation, at only $99 per month on average.