Arizonans are paying more to protect their homes, but they're not alone. Homeowners in nearly every part of the country are having to pay higher annual insurance premiums, according to a new in-depth study released by the nonprofit Consumer Federation of America (CFA).
The report finds homeowners saw their insurance premiums increase by an average of 24% over the last three years, from 2021 to 2024. However, according to CFA and the Arizona Public Interest Research Group, the data for Arizona paints an even more unfortunate picture. Arizonans are experiencing the third sharpest increase in the cost of homeowners insurance premiums, double the national average at 48%. That equates to a more than $700 increase in the three-year span.
“Skyrocketing double-digit increases in homeowners’ insurance premiums and the potential inability to find adequate insurance, particularly in areas prone to wildfire, have the potential to wreak havoc on household budgets in Arizona,” stated Diane E. Brown, Executive Director of Arizona PIRG, in a news release.
The study said homeowners insurance is increasing for many reasons, including more expensive construction and building materials, a costlier global reinsurance market, weak government oversight, and climate change.
"While hurricanes and wildfires often attract the most attention, a rise in extreme weather events is impacting almost all parts of the country, including many states in the Midwest," authors of the study wrote.
As for reinsurance, that is insurance for insurers that is not regulated at the global level. According to the study, many reinsurance companies which are based outside of the U.S. have increased prices for U.S. insurers for several years in a row.
When it comes to government involvement, while homeowners insurance is regulated at the state level, rules vary and few states require a review or approval of a premium increase before one is made.
CFA is calling on lawmakers and regulators to require insurance companies publicly disclose transactions with consumers, similar to the detailed data reporting of mortgage applications. Under the Home Mortgage Disclosure Act, mortgage lenders have been required to report detailed data annually for decades. However, authors of the study state, while the National Association of Insurance commissioners collected some data about homeowners insurance last year, the Federal Insurance Office has only made a limited amount of the data public.
So, what can homeowners do to lower insurance premiums?
- Shop around and compare rates
- Improve your disaster and security for potential discounts
- Bundle insurance to save where possible
- Consider raising your deductible to lower your monthly premiums
