Arizona Department of Insurance Increases Private Passenger Automobile Property Damage Threshold
Feb 9, 2015
In Regulatory Bulletin 2015-01 issued today, February 9, 2015, the Arizona Department of Insurance (“ADOI”) advised that the Private Passenger Automobile Property Damage Threshold for Purposes of A.R.S. § 20-1631(E) has been revised to reflect an increase.
In the Bulletin, the ADOI reminded insurers that it administers the laws controlling their ability to cancel or nonrenew personal automobile insurance policies in Arizona (see A.R.S. § 20-1631 et seq.). The law sets forth the limitations on an insurer’s ability to cancel or nonrenew a personal automobile policy after it has been in effect for 60 days and A.R.S. §20-1631(E) lists additional conditions and limitations for cancellations and nonrenewals, including the provision that: “An insurer shall not fail to renew more than one-half of one percent of its policies annually pursuant to this subsection.”
For accidents occurring after January 1, 2000, A.R.S. §20-1631(E) requires the ADOI to annually adjust and publish (to the nearest $10) the threshold amount of property damages insurers may use to nonrenew private passenger automobile policies under Subsection E.
The ADOI must base the threshold adjustment upon the percentage change in the all-items component of the consumer price index for all urban consumers (CPI-U) of the United States Department of Labor, Bureau of Labor Statistics (“BLS”).
To date, the adjusted thresholds are as follows:
|
Circular Letter Or Bulletin Number |
Date |
BLS’ CPI-U |
Property Damage Threshold |
|
Regulatory Bulletin 2005-2 |
2/02/05 |
2.7% |
$2,080 |
|
Regulatory Bulletin 2006-1 |
1/19/06 |
3.4% |
$2,150 |
|
Regulatory Bulletin 2007-1 |
2/01/07 |
3.2% |
$2,220 |
|
Regulatory Bulletin 2008-02 |
2/11/08 |
2.8% |
$2,280 |
|
Regulatory Bulletin 2009-01 |
2/01/09 |
3.8% |
$2,370 |
|
Regulatory Bulletin 2010-01 |
2/12/10 |
-0.4% |
$2,360 |
|
Regulatory Bulletin 2011-02 |
1/31/11 |
1.6% |
$2,400 |
|
Regulatory Bulletin 2012-01 |
1/31/12 |
3.2% |
$2,480 |
|
Regulatory Bulletin 2013-01 |
1/23/13 |
2.1% |
$2,530 |
|
Regulatory Bulletin 2014-01 |
2/05/14 |
1.5% |
$2,570 |
The BLS’ most current United States’ City Average CPI-U is 1.6 percent. Therefore, as of the date of this Regulatory Bulletin, the ADOI hereby increases the property damage threshold level to $2,611 ($2,570 X 1.016 rounded to the nearest $10). Insurers may not use Subsection E as a basis to nonrenew personal automobile policies unless they meet all of the A.R.S. §20-1631(E) requirements and the property damage exceeded $2,611 in 2015.
The $2,611 threshold is effective immediately and remains in effect until the ADOI publishes an adjusted threshold in 2016.
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