The answer to this question is both yes and no. Insurers offering homeowners insurance policies in Arizona are required to base their premiums on their loss experience specific to Arizona. This means that if an insurer pays out extensive claims in another state, they cannot attempt to recoup those losses by passing along rate increases to Arizona policyholders. However, insurers routinely purchase their own insurance in the event of a catastrophic claims payout. This insurance is referred to as "reinsurance" and protects insurers from paying claims that could lead to the insurer becoming insolvent. When covered perils increase, such as the risk of wildfire, the cost of reinsurance also increases for insurers. The cost increases of reinsurance can be passed along to policyholders by the original insurer.