Arizona homeowners are paying more for home insurance than property taxes after average premiums increased 71% over five years. The average annual insurance cost reached $2,225, compared with $1,950 in average yearly property taxes, according to LendingTree analyses of data from Quadrant Information Services, the U.S. Census Bureau, the Federal Housing Finance Agency and Freddie Mac.
Arizona ranked sixth among states for the largest insurance-premium increases during the period studied. Colorado recorded the biggest increase, at 101%. Arizona’s average premium rose 3.6% in 2025, below the 6% national increase.
Higher rebuilding expenses and losses from wildfires, flooding and severe storms are among the factors cited by industry analysts. Arizona recorded nine weather-related events that each caused more than $1 billion in damage from 2020 through 2024, according to the National Oceanic and Atmospheric Administration.
Insurance analyst Rob Bhatt of LendingTree said insurers face higher claim costs because repairing and rebuilding homes has become more expensive. Colorado, Florida and California are among the states where insurers have withdrawn from some markets because of severe-weather exposure. Colorado’s average annual premium was $5,553, and the state experienced 22 billion-dollar weather events during the same period.
Insurance costs were identified as the biggest financial concern by 48% of people recently surveyed by the Insurance Fairness Project. The Arizona Department of Insurance and Financial Institutions oversees insurers, but it does not maintain an average-premium figure and cannot set a limit on what companies charge.
A 12-member council created by the department in 2025 examined rising rates and policy cancellations in wildfire-prone areas of northern Arizona. Its recommendations included removing easily ignited materials near homes, expanding fire-risk reduction work and creating grants to help property owners pay for improvements. FEMA estimates that each dollar spent on disaster preparation can prevent $6 in later property losses.
