PHOENIX — Rising mortgage rates and home prices have dominated headlines, but another growing cost is putting pressure on Arizona homeowners: skyrocketing insurance premiums.
Home insurance rates in Arizona have surged more than 70% between 2019 and 2024, ranking the state fourth-highest in the nation, according to a recent Lending Tree report. In comparison, the national average increase during the same period was just over 40%.
“It used to be that insurance was kind of a fixed cost that gets rolled into your escrow,” said Shannon Martin, an insurance expert with Bankrate. “You might see slight changes, but now we’re seeing significant increases that can really affect your ability to pay your mortgage.”
These rising premiums are reshaping how people shop for homes. Martin said buyers are now being urged to get insurance quotes early in the process to understand how it could impact affordability.
How Much Does Home Insurance Cost in Arizona?
The average annual premium for $300,000 in dwelling coverage in Arizona now tops $2,300. For Phoenix residents, it’s even higher — about $2,800 per year, which is roughly $340 more than the national average, according to Bankrate.
Several factors are behind the increase, including rising home values and higher costs for construction materials and labor. On top of that, extreme weather risks are increasingly affecting rates.
“You look at the cost of building materials, the cost of labor, and the increased risk from extreme weather — all those are factored into the equation,” Martin explained.
Although Arizona avoids many large-scale natural disasters like hurricanes and tornadoes, it does face extreme heat, wildfires, and occasional flooding. These risks contribute to higher premiums — even though standard policies typically don’t cover damage from heat or floods. Homeowners must pay extra for that additional protection.
As insurance costs climb, they’re becoming a major hurdle in the path to homeownership for many Arizonans.
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