FACT SHEET: Arizona’s Home Insurance Crisis
Last Updated: 9/28/26
Climate change is pushing Arizona property insurers to raise rates and cancel policies. Between 2020 and 2025, home insurance rates in the Copper State increased by 71%. The increasing risk of wildfires in the state is a major driver of Arizona’s home insurance crisis. Trump’s cuts to the U.S. Forest Service that hinder wildfire response, alongside his far-reaching tariffs, will make Arizona’s home insurance crisis even worse.
- ARIZONA’S HOME INSURANCE RATES HAVE SOARED IN RECENT YEARS, AND COSTS CONTINUE TO GROW
- INSURERS ARE REFUSING TO RENEW HOMEOWNERS’ POLICIES OR ARE PULLING OUT OF ARIZONA’S INSURANCE MARKET ALTOGETHER
- CLIMATE CHANGE AND EXTREME WEATHER ARE DRIVING ARIZONA’S INSURANCE CRISIS
- TRUMP WILL MAKE ARIZONA’S INSURANCE CRISIS EVEN WORSE
ARIZONA’S HOME INSURANCE RATES HAVE SOARED IN RECENT YEARS, AND COSTS CONTINUE TO GROW
- Between 2020 and 2025, home insurance rates in Arizona increased by 71%, placing the state among the top six with the largest rate increases.
- In 2025 alone, home insurance rates in Arizona increased by 3.6%.
- Arizona had the biggest jump in home insurance rates between 2019 and mid-2024, when home insurance premiums skyrocketed more than 62%
- Between 2021 and 2024, home insurance rates increased by 47% in the Phoenix metro area, outpacing the national average of 24%.
- As of May 2026, Arizona homeowners were paying an average of $3,415 annually, or about $285 per month, to insure a home for $400k – about $925 higher than the national average for comparable policies.
- As of May 2026, Phoenix homeowners were paying an average of $4,250 annually, or about $355 per month, to insure a home for $400k – about $1,760 higher than the national average for comparable policies.
- Home insurance costs in Arizona averaged 9.5% of monthly housing costs for homeowners – on average 1.47 times the cost of property taxes – and 19.9% of owner-occupied households were cost-burdened, spending at least 30% of their income on housing costs.
- As insurance rates have risen, so has the rate of Arizona homeowners falling behind on their mortgage payments: the rate of mortgages 90 to 180 days past due in the first quarter of 2026 was up nearly 43% from the same period in 2025.
- Higher premiums increase the likelihood of mortgage delinquency, with a 2024 study finding that a $500 increase in annual insurance premiums was linked to a 20% higher mortgage delinquency rate.
INSURERS ARE REFUSING TO RENEW HOMEOWNERS’ POLICIES OR ARE PULLING OUT OF ARIZONA’S INSURANCE MARKET ALTOGETHER
- In 2025, about one in every 48 households in Arizona received an insurer-initiated nonrenewal, the fifth-highest rate nationwide.
- In the Phoenix metro area, 12.1% of homeowners are uninsured, and 15.1% of all homeowners statewide are uninsured.
- Insurance marketplace The Zebra ranked Phoenix the fifth-worst city for home insurance in the U.S., owing to its nonrenewal rate of more than 5.6% and high vulnerability to windstorms, dust storms, wildfires, and extreme heat.
- In the Tucson metro area, 17% of homeowners are uninsured, the 11th-highest rate out of the 100 most populated metro areas nationally.
- Nationally, 14% of Latino homeowners and 11% of Black homeowners do not have home insurance, compared with 6% of white homeowners.
- As of 2024, Latino and Black people made up 32.1% and 5.1% of Arizona’s population, respectively.
- In 2024, State Farm began dropping home insurance coverage in high-risk areas for wildfires in Arizona.
- In October 2023, Pekin Insurance announced it would temporarily stop accepting new homeowners’ insurance clients in multiple states, including Arizona, due to increasingly severe weather events.
- In 2023, CSE Insurance pulled out of Arizona amid increasing wildfire risk.
- Arizona lacks a state-backed insurer of last resort to provide homeowners access to coverage when traditional insurers decline, leaving those who lose coverage to buy riskier surplus insurance or go uninsured.
CLIMATE CHANGE AND EXTREME WEATHER ARE DRIVING ARIZONA’S INSURANCE CRISIS
- Between 2010 and 2026, Arizona saw 22 billion-dollar extreme disasters, including severe storms, drought, wildfire, and flooding, totaling as much as $10 billion in damages.
- Approximately 62%, 51%, 29%, and 19% of properties in Coconino, Pima, Cochise, and Maricopa counties, respectively, face higher insurance prices or canceled policies because of wildfire and flood risk.
- 7 million Arizonans live in areas where wildfire poses a high or very high risk to homes.
- The number of homes in Arizona has doubled since 1990, with about 1.4 million homes in wildland-urban interface areas that are at higher risk of wildfires.
- Wildfires in the Southwest region, which includes Arizona, burned an average of 3.3 million acres annually from 2018 through 2022, and between 2018 and 2026, Arizona had 25 federal disaster declarations due to wildfires.
TRUMP WILL MAKE ARIZONA’S INSURANCE CRISIS EVEN WORSE
- Trump’s tariffs were expected to increase home insurance costs in Arizona by $97.
- Tariffs were expected to make rebuilding after disaster more expensive. The National Association of Home Builders estimates a cost increase of $10,900 per home due to tariffs on construction materials.
- As of September 2026, USFS had lost about 6,000 employees, or 15% of its workforce, during Trump’s second term, hampering efforts to clear brush and thin trees to reduce the risk and intensity of wildfires, and stunting the agency’s capacity to stop the spread of wildfires when they break out.
- In 2026, Trump’s chaos and cuts at USFS led to reductions of 44% in prescribed burning and 40% in fuel-reduction work – two leading strategies for wildfire prevention – ahead of fire season.
- In addition to staffing cuts, 17% of firefighting jobs in the Forest Service’s Southwest region, which included Arizona, were unfilled as of July 2025.
- Trump’s attempts to gut FEMA programs, undermine NOAA research and forecasting, and cut disaster relief at the Department of Housing and Urban Development would all contribute to higher home insurance costs.
- FEMA also administers the National Flood Insurance Program (NFIP), which provides coverage for more than 4.7 million homeowners, including many who otherwise could not obtain coverage.
- As of August 2026, NFIP policies covered 21,371 properties in Arizona.