PHOENIX — More Arizonans are finding themselves shopping for increasingly expensive homeowners insurance policies as some learn their provider will no longer cover their home – or maybe leaving the state of Arizona altogether.
On Monday, the Arizona Department of Insurance and Financial Institutions announced the creation of a new council to address the availability and affordability of homeowners insurance throughout the state.
“The Department is aware of the difficulties that Arizona homeowners in these areas face in finding coverage for their homes, and that they are increasingly turning to local, state, and national leaders to address the issue,” the Department said in a statement about the new Resiliency and Mitigation Council.
“We’re not in a panic state right now, I do think that it's to a degree where we're concerned,” DIFI Deputy Director Lori Munn told 12News. “That's why we wanted to get this council together and really start diving into this before it does escalate and get to a point where it is a panic situation.”
The council is focused on forested areas and what is called “wildland-urban interface” areas, which include communities in and near Phoenix.
Matt Hartranft lives in Ahwatukee and is part of a Facebook community group where several members commiserated after learning they had to find new insurance providers.
“I was surprised at how many people are going through the same thing,” Hartranft said.
Hartranft said that his insurance broker informed him that his former insurance provider would not renew his policy earlier this year.
He began searching for other options to cover the home and found his best option would come with a large new price tag.
“It was about 32 and a half percent increase, pretty significant, and obviously not budgeted,” Hartranft said.
12News has requested records from the Department of Insurance to better understand how widespread the issue is and how many companies are choosing not to renew policies. The department is working to provide the records.
What’s driving up the costs of homeowners’ insurance?
Arizona wildfires are not the only factor driving up the costs of insurance.
“It's really happening nationwide,” said MJ Cordova, an agent that represents more than 30 insurance companies in Arizona. “The insurance companies have been hit so hard with catastrophes, the wildfires, the hurricanes and such, that they're really having to narrow their focus on where they want to do business and who they want to do business with.”
Wildfires in Arizona and other states, extreme storm damage including hurricanes, and even common storms can all contribute to raising costs.
Moreover, the cost of housing has increased significantly since 2020, which increases the costs of insuring the home. Material costs have increased, which raises the cost of fixing homes.
“It's so much more expensive to rebuild a house now than it would have been two years ago, or four years ago, six years ago,” Cordova said.
Still, the Arizona homeowners insurance market is considered strong. The state provides a list of dozens of providers that do offer coverage, including in forested areas.
What can homeowners do?
Homeowners have many options for mitigating their risk of damage, and some grants are available to help homeowners mitigate potential losses from wildfires.
Cordova said it’s worth the time to talk to an agent and be informed when shopping for insurance.
Advice from an insurance agent:
Shop around
Maintain your home
Be selective in submitting claims
“Every time you file a claim, know that not only your insurance company, but anybody you're going to shop with is going to look at all those claims and say, ‘Okay, this person has a much higher potential for filing claims, therefore we're going to add this much to their rate.’” Cordova said.
“There's 101 reasons why your rate could go up, and that's why it's such an individual conversation. But in general, I would tell people that, the less we use our insurance, the better, and it's really meant for catastrophic loss, not for inconvenience loss,” Cordova said.
About the Resiliency and Mitigation Council
The first Council meeting is scheduled for Dec. 11 at 1 p.m.
Interested attendees may join the meeting in person or online.
Currently, 10 members representing government agencies and insurance organizations are on the council. There are two vacancies for Tribal members.
Director Barbara D. Richardson, DIFI
Director Thomas A. Torres, Arizona Department of Forestry and Fire Management
Tom Savage, League of Arizona Cities and Towns
Terri Edwards, Independent Insurance Agents and Brokers of Arizona
Chief Jake Rhoades, Arizona Fire Chiefs Association
Chief Randy Chevalier, Arizona Fire District Association
Carmine DeBonis, Jr., Pima County
Jacob Emnett, County Supervisors Association of Arizona
Laura Curtis, American Property and Casualty Insurance Association
Michael Newman, Insurance Institute for Business and Home Safety
Vacant, Inter Tribal Council of Arizona
Vacant, Navajo Nation
For more information on the next meeting, check the DIFI website: https://difi.az.gov/resiliency-and-mitigation-council
For tips on this or any other story, contact 12News at connect@12news.com
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