Arizona Homeowners Pay Some of the Lowest Insurance Costs In The Country—But How Long Will It Last?

Arizona homeowners continue to see relatively affordable homeowners insurance compared with much of the country.

While premiums have climbed in high-risk coastal states, data from the U.S. Census Bureau and the Realtor.com® 2025 Climate Risk Report show that Arizona remains on the lower end of the spectrum.

Given that, places like Prescott, AZ are making a splash, with the town landing on this summer's Wall Street Journal / Realtor.com® Luxury Housing Market Ranking for high-end buyers who are looking for more value in real estate.

But the truth is rates are starting to climb, and climate risk is a big part of that.

Arizona’s Insurance Costs Stay Affordable

According to newly released American Community Survey (ACS) data from the U.S. Census Bureau, Arizona homeowners with a mortgage typically pay $1,000–$1,499 annually for homeowner’s insurance, while those without a mortgage average $800–$999; overall costs fall in the $1,000–$1,499 range.

Arizona has 2,020,822 insured homeowner households in total—1,224,573 with a mortgage and 796,249 without. Among mortgaged owners, 119,530 pay less than $100 annually and 47,783 pay $4,000 or more. Among those without a mortgage, 186,143 pay less than $100 and 20,530 pay $4,000 or more.

But make no mistake, insurance premiums are climbing nationwide—and Arizona is no exception. From 2019 to 2024, the average annual premium in the state jumped 48%, outpacing the 13% inflation rate over the same period, according to an April 2025 report from the Consumer Federation of America.

Climate Risks Are Less Severe

The Realtor.com 2025 Climate Risk Report found that the steepest insurance burdens are concentrated in coastal markets like Miami, Florida, and New Orleans, Louisiana, where premiums account for more than 3% of median home values. In contrast, Arizona metros did not appear among the nation’s most at-risk markets for flood or hurricane wind damage.

However, the state does face wildfire exposure. Nationally, about 5.6% of homes—worth $3.2 trillion—are at severe or extreme wildfire risk, with California accounting for the largest share. Phoenix ranks among the top U.S. metros for total home value exposed to severe or extreme wildfire risk, at $249.2 billion, or 28.4% of its housing stock. This exposure underscores why insurance costs, while affordable today, could shift as wildfire risks intensify.

Insurance Affordability Is a National Concern

Across the U.S., affordability remains a pressing issue. The Realtor.com 2025 Insurance Affordability Report found that 75% of Americans believe homeowners insurance could soon become unaffordable, while nearly half say they’ve already struggled with renewing or obtaining coverage.

Those pressures are reshaping buyer behavior: nearly 30% of current homebuyers said they have completely changed the geographic area they are searching in due to insurance challenges, while another quarter said they had overhauled their entire homebuying strategy.

For Arizona households, relatively modest insurance costs continue to provide a buffer from these national pressures. But with wildfire exposure a growing concern, affordability could become a bigger challenge in the years ahead.

This article was produced with editorial input from Dina Sartore-Bodo, Gabriella Iannetta, and Allaire Conte.