A new analysis shows a sharp divide in the cost of home insurance across the U.S. While extreme weather drives prices to record highs in many states, Arizona’s rates remain below the national average.
The national average premium for home insurance has risen to $2,470 per year. That is a 9% increase since 2023. The data comes from a new Bankrate study.
In Arizona, homeowners pay an average of $2,309 annually. This cost represents about 2.99% of the average income in the state. The price is slightly higher in the Phoenix metro area, at $2,387.
The reason for the disparity is risk. States facing hurricanes and tornadoes are seeing the highest premiums. Nebraska ($6,425), Louisiana ($6,274), and Florida ($5,735) top the list.
Arizona avoids those specific storms. But it faces a major threat of its own: wildfires. Statewide, over 123,000 homes are at moderate or greater risk from wildfires. The cities of Flagstaff and Prescott have the most vulnerable properties.
This wildfire risk means some Arizona homeowners could still see price hikes or even policy cancellations.
The report also notes that high premiums do not always mean a heavy financial burden. In areas with high incomes, the cost takes up a smaller share of a homeowner’s pay.
There is some positive news. Efforts in Florida to fix its insurance market appear to be working. The state saw a 9% decrease in average premiums from 2023 to 2025.
Experts warn that the national trend is concerning. A U.S. Senate report found that climate change is causing insurers to cancel policies in high-risk areas. This is often a sign of a unstable insurance market.
The amount any individual pays for insurance depends on many factors. These include the home’s value, its construction materials, and the homeowner’s credit score. These figures also do not include the cost of separate flood insurance policies.
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