How much is homeowners insurance in Arizona, and what affects the price?

Why we don't quote an "average" price

Insurers price each home on its own risk. The Arizona Department of Insurance and Financial Institutions (DIFI) says the price insurers charge is set by how likely a claim is and what it would cost to handle. Two homes on the same street can get different quotes, so a statewide average isn't a reliable number for your budget. Get quotes for the specific home.

What affects a homeowners insurance premium in Arizona?

• Cost to rebuild, not market value. DIFI says coverage needs are based on replacement cost. Labor and material costs can rise no matter what the real estate market does. DIFI cites Verisk data showing Arizona's average residential reconstruction costs rose 6% from September 2022 to September 2023.
• Wildfire risk and fire protection. Insurers commonly use the ISO Public Protection Classification, which runs from Class 1 to Class 10 (lower numbers mean stronger fire protection) and is based on fire departments, water supply, emergency communications and community risk reduction. DIFI says 38 Arizona communities are rated 8B or worse, that insurers typically won't insure homes rated Class 10, and that a single home can rate differently from its community depending on its distance from a fire station or water source.
• Your claims history. DIFI says insurers review claim history to set rates and decide on renewal, and that small repairs below your deductible may be better paid out of pocket.
• Your deductible. A higher deductible can lower the premium significantly, but it means paying more yourself when you have a claim.
• Policy type and coverage. A standard HO-3, a condo HO-6 ("walls-in," with the HOA's master policy covering the rest) and a manufactured-home HO-7 are priced differently, as are replacement cost and actual cash value coverage for your belongings.
• Credit-based insurance scores. Arizona law limits which credit information an insurer can use and requires insurers to give the main reasons when credit leads to an adverse decision (A.R.S. §20-2110).
• Dogs. Since June 30, 2023, an Arizona insurer can't use a dog's breed as the sole factor in underwriting or pricing (A.R.S. §20-1510, per DIFI), though it can consider having a dog or a dog's bite history.

Why are Arizona premiums going up?

DIFI says premiums are rising across the state, not only in wildfire-prone areas, driven by higher construction and labor costs and by the cost of reinsurance, the insurance that insurers buy for themselves. Arizona uses a "use and file" system: an insurer can start using a new rate immediately and file it with DIFI within 30 days. DIFI checks that rates aren't excessive, inadequate or unfairly discriminatory, but says it has limited authority to directly influence rates.

What doesn't a standard policy cover?

• Flood. Standard homeowners insurance doesn't cover flood damage. You need a separate flood policy, such as one through FEMA's National Flood Insurance Program. DIFI notes flood risk often rises after wildfires.
• Earthquakes. The CFPB says a standard policy doesn't cover earthquakes.
• Wear and tear. Breakdowns of systems and appliances, like an AC unit, fall under a home warranty (service contract), not insurance. Mold and rot from water damage are typically excluded.

How does insurance fit into my monthly payment?

The CFPB says lenders generally require homeowners insurance and show the estimated cost on page 1 of your Loan Estimate under "Projected Payments." With an escrow account, the premium is spread into your monthly payment. You can shop for your own policy; DIFI says you don't have to use an insurer your lender recommends. If coverage lapses, the lender can buy force-placed insurance, which the CFPB warns may protect only the lender and usually costs more.

Your lender may require coverage of at least the loan amount, but DIFI cautions that this may be too much or too little for your home. Ask your agent about replacement cost.

Before you write an offer

1. Ask an insurance agent for a quote on the specific address. Ask about the home's fire protection class and roof age.
2. Ask whether the home is in a flood zone and whether flood coverage is recommended.
3. For a condo, ask the HOA what its master policy covers.
4. Put the quote into the payment calculator with the home's taxes and HOA dues.

A free account shows every home for sale that fits the monthly payment you're comfortable with, each with its real property taxes, HOA dues, estimated homeowners insurance, and mortgage insurance when it applies, plus its own closing cost estimate and APR disclosure.

Searching is free, and we never sell your information or pass it to other lenders or marketers. Only Rebel Rate Mortgage, Inc. contacts you, and only about your own search.

Related: why an escrow payment goes up · mortgage insurance vs. homeowners insurance · how much house can I afford? · cost of owning in Arizona · more questions.

General information, not insurance advice. Coverage, exclusions and price come from the policy and quote you receive. Contact DIFI's Consumer Protection Division at (602) 364-2499 with questions about an insurer.

More Arizona home buyer questions · Calculators · Homes by monthly budget · All Arizona cities

Sources

• Arizona Department of Insurance and Financial Institutions, Home Insurance: Consumer Information (retrieved October 22, 2026)
• Consumer Financial Protection Bureau, What is homeowner's insurance? Why is homeowner's insurance required? (last reviewed Aug 8, 2024; retrieved October 22, 2026)
• Arizona Revised Statutes §20-2110 (reasons for adverse underwriting decisions; limits on credit-based insurance scores) (retrieved October 22, 2026)
• FEMA National Flood Insurance Program, FloodSmart: Get Insured (retrieved October 22, 2026)
• Consumer Financial Protection Bureau, What is an escrow or impound account? (last reviewed Sep 11, 2024; retrieved October 22, 2026)

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