Frequently Asked Questions
(FAQ's)
Is Car Insurance Required in Arizona?
Many people confuse the Arizona state statutes thinking that Automobile Insurance through private traditional insurance companies is “required” by law, when in fact the law states “...one of the statutory forms of financial responsibility…” This means what the state actually requires is proof of financial responsibility from you in order to operate a vehicle on public roadways. This can be in the form of insurance from an Arizona auto insurance carrier, or a Certificate of Financial Responsibility. A certificate of financial responsibility can be obtained by either of the following methods.
1.) Depositing $40,000 cash or an equivalent Certificate of Deposit with the Arizona State Treasurer, the deposit is held continuously for as long as the vehicle(s) are being operated, and the depositor (you) must be able to prove exclusive financial responsibility for any accidents.
This method does not provide “insurance” coverage in the traditional sense but only provides proof that you can pay for most damages if you cause an accident. There is no protection against damage to your vehicle or your bodily injury. If a judgment is entered against you in a traffic accident, the funds may be seized to pay the claim, and any damages beyond the $40,000 becomes your responsibility to pay out of pocket including adjudicated medical bills to the injured party which could reach thousands to hundreds of thousands if those injured do not have health insurance. After a qualifying claim, you must restore the full $40,000 or use another method of financial liability to continue operating a vehicle.
2.) You may purchase a Surety Bond from a company legally authorized to conduct business in Arizona. The bond must meet the minimum liability limits in the state of Arizona. The price of such bonds are determined by the bond company and are subject to credit reports and other determining factors. If you are found liable for an accident the surety company pays the claim up to the bond limit then seeks reimbursement from you. This is not insurance and does not cover damage to your vehicle or cover your bodily injury. These bonds function like a line of credit and if you default on payment or repayment to the surety they will seek legal action against you. If a judgement is made against you for an accident and the actual liability exceeds your bond limit you become personally financially responsible for covering those costs which can reach thousands to hundreds of thousands of dollars.
Additional Notes: If you have a lien holder or a leased vehicle, those entities will require traditional insurance for coverage of damage to your vehicle (comprehensive and collision).​
Is Motorcycle Insurance Required in Arizona?
Arizona's financial responsibility laws are the same for motorcycles and any vehicle driven on public roads as it is for regular cars. See the above "Is Car Insurance Required In Arizona?"
Is Home Insurance Required?
Homeowner’s insurance is not legally required by state or federal laws. However, if your home does have a mortgage, a lien, or other entity attachment then those entities will require insurance that must meet their minimum coverage requirements. If you do not insure the home and provide proof of insurance to the respective entity they will "force place" insurance and charge you for that insurance in your monthly mortgage payment. (Note: Force Placed Insurance is usually much more expensive than obtaining coverage on your own.)
We never recommend individuals drop homeowner’s insurance even if the home is paid off, even if an individual is able to self insure and pay for losses because there’s so much more contained within a homeowner’s policy beyond coverage for the structure itself. Visit our Home Insurance page for more details about coverage.