Arizona Home Insurance Costs Rose 71% Since 2020
Homeowners in Arizona now pay an average of $2,225 annually for coverage as insurance costs continue to climb.
Updated on Sept. 20, 2026 in Insurance
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The average annual home insurance premium in Arizona reached $2,225 in 2025 following a 3.6% increase over the prior year. This figure reflects a sharp 71% rise in costs since 2020, placing the state sixth nationally for total insurance premium growth over the five-year period.
Why it matters
Higher premiums stem from increased rebuilding costs and frequent extreme weather events, which have resulted in multiple losses exceeding $1 billion. These rising expenses have made property insurance the top financial concern for 48% of surveyed Arizonans.
Arizonans pay an average annual home insurance premium of $2,225, which sits above the $1,950 average annual property tax in the state. While premiums rose 71% over the last five years, the exact impact of ongoing mitigation efforts on future household bills remains unknown.
The players
Arizona Department of Insurance and Financial Institutions
A state agency responsible for industry oversight that does not currently regulate the rates insurance companies charge homeowners.
Arizona Insurance Task Force
A 12-member group established in 2025 to investigate the factors driving high property insurance rates across the state.
The details
Insurance companies adjust rates based on the rising cost of paying claims following severe storms, wildfires, and floods. Because the Arizona Department of Insurance and Financial Institutions does not regulate these rates, insurers pass these loss-driven costs directly to the consumer. A 12-member state council was formed in 2025 to investigate these high costs and potential relief measures.
Timeline
2020-2024: Nine weather events caused losses exceeding $1 billion.
2020-2025: Arizona insurance premiums rose by 71%.
2025: Arizona formed a task force to examine insurance costs.
2025: Arizona insurance premiums increased by 3.6%.
Money Landscape
Arizona's insurance market currently follows a pattern of sharp cost escalation, with the 71% jump since 2020 significantly outpacing typical inflationary markers. This trend highlights the growing pressure on household budgets as property insurance costs now frequently exceed standard annual property tax burdens.
Households facing rising premiums may consider performing fire mitigation home improvements, which can potentially lower insurance costs. Consult with a qualified insurance professional to review your current policy coverage and identify any available opportunities for premium adjustments.
The takeaway
Property insurance has become a significant budget strain as costs in the state have risen 71% over the last five years. Homeowners should track upcoming recommendations from the 12-member state insurance task force to see if future policies may offer relief for their annual premiums.
Further reading
Learn more about local trends at Arizona Insurance.
Source note: This article includes information reported by AZ Central.
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