The following factors are currently influencing homeowners insurance rates and availability:

• Increases in the cost and volume of claims: It’s a fact that homeowners insurance in Arizona, and across the country, has changed significantly in the past few years. The increased amount of funds paid out per claim  and the increased number of submitted claims has resulted in increases in the cost of insurance and a reduction in the number of insurers willing to provide homeowners policies.
• Increases in construction and labor costs: Increased costs of construction materials and a shortage of skilled tradesmen have driven up construction costs, making it more expensive to rebuild or repair your home if it were damaged or destroyed. 
• Increases in home values: When home values increase, more insurance coverage is required to fully insure the home. Higher coverage amounts equal higher insurance premiums.
• Increases in the severity and number of natural disasters: Arizona has experienced increases in the severity of storms and natural disasters. This means our homes are more frequently exposed to natural disasters and catastrophic events, driving up insurance costs due to increases in the number of claims and severity of losses. Additionally, due to Arizona’s dry climate and expanding development in wildland-urban interfaces (the line, area, or zone where structures and other human development meet or intermingle with undeveloped wildland or vegetative fuels), many locations in Arizona are susceptible to wildfire. Summer monsoon storms also cause damage to homes through high winds and hail.  
• Selected coverage type, limits, and deductibles all contribute to premium cost: Homeowner policies are tailored to meet the coverage needs of individual homeowners. Every homeowner has decision points within a policy where they select coverage amounts and deductibles that all contribute to the final cost of the policy. If you select higher limits for your dwelling, personal property, loss of use, or liability coverage, you will see an increase in premium. This includes your decision to buy a policy that covers actual replacement cost versus receiving the market value of the home should it be lost entirely.

While in general, increases in homeowners insurance premiums are occurring statewide due to some of the conditions above, there is an elevated concern in forested areas and wildland-urban interface areas in Arizona due to the increased probability of a destructive wildfire occurring in these areas.