Arizona homeowners now pay more on average for home insurance than property taxes after premiums surged 71% in five years.
Arizona’s average annual home insurance cost is $2,225, according to LendingTree’s most recent analysis of Quadrant Information Services data. Property taxes cost Arizona homeowners an average of $1,950 annually, according to the financial firm’s analysis of U.S. Census Bureau, Federal Housing Finance Agency and Freddie Mac data.
Rising rebuilding costs and damage from wildfires, floods and severe storms are contributing to higher premiums, industry analysts say. Arizona regulators cannot cap what insurers charge, but a state task force has recommended expanding fire mitigation work and offering grants to help homeowners reduce
their risks.
Arizona ranks No. 6 nationally for the biggest home insurance premium increase during the five years tracked. Colorado had a 101% hike in property insurance costs between 2020 and 2025, the highest in the United States.
Arizona’s high home insurance rates are a major concern for the state’s homeowners with 48% of those recently surveyed by the Insurance Fairness Project citing property insurance costs as their biggest financial concern.
The Arizona Department of Insurance and Financial Institutions regulates insurers but doesn’t track average annual home insurance premiums and can’t limit how much insurers charge.
Why are Arizona insurance costs rising?
Arizona has experienced expensive wildfire and flooding damage from storms with nine extreme weather events that caused losses exceeding $1 billion between 2020 and 2024, according to the National Oceanic and Atmospheric Administration.
But Arizona doesn’t have as many costly natural disasters as other states.
Colorado has the highest average U.S. home insurance premiums with an average annual cost of $5,553, according to LendingTree. The state had 22 weather events costing more than $1 billion in damage from 2020 to 2024.
Insurers have been pulling out of states with more extreme weather, including Colorado, Florida and California.
“Insurance companies have to repair more homes, and it's more expensive to rebuild each one than it might have been just five years ago,” said Rob Bhatt, LendingTree's insurance analyst. “When their costs of paying claims go up, they turn around and raise our rates.”
Arizona task force examined high insurance costs
Arizona’s big jump in home insurance costs and insurers canceling policies in northern parts of the state with high wildfire risk led to the creation of a state task force.
In 2025, the Arizona Department of Insurance and Financial Institutions formed a council of 12 members from cities, towns, counties and fire departments to look at why property insurance rates are so high.
The state’s higher home insurance rates isn’t a problem with a single solution, said Maria Ailor, who was then interim director of the state regulator, in the council’s final report.
The council’s recommendations include more homeowner fire mitigation such as removing easily combustible materials around a property, and Arizona providing grants to help pay for those improvements.
According to the Federal Emergency Management Agency, every dollar invested in disaster mitigation could save $6 in future property losses.
“Proactive measures can make a difference to potential home damage,” said Courtney Klosterman, housing expert at Hippo Home Insurance. “Home improvements can lower your insurance premiums by reducing your risk of damage or loss.”
Arizona insurance rates aren’t falling but didn’t climb as fast last year as previous years.
Arizona’s average home insurance cost increased 3.6% in 2025, less than the U.S. average of 6%, according to LendingTree.
This article originally appeared on Arizona Republic: Arizona's home insurance rates soar 71%. Here's how you can cut costs
