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Arizona rural homeowners face insurance drops
Arizona residents in rural areas are facing abrupt homeowners insurance cancellations and steep rate hikes as insurers cite wildfire risks. Lawmakers are gathering data to consider potential legislative fixes. FOX 10's Nicole Krasean reports.
NAVAJO COUNTY, Ariz. - Many rural residents in Arizona have seen their homeowners insurance policies abruptly canceled, while others find their rates increasing dramatically. Among the primary drivers behind the shifting market are natural disasters, including wildfires and flooding.
Local perspective:
Bob Herber, who has lived in the Heber-Overgaard area for nearly eight years, received notice last September that his homeowner's insurance was expiring in 30 days due to wildfire risk and would not be renewed.
"So I started researching more insurance companies and half of them would not bid me and the other half would give me quotes that were 500–1000% higher," Herber said.
Herber attempted Firewise projects to mitigate the threat, but the efforts did not solve the problem.
"They say a new roof is necessary, which I did," Herber said. "That didn't seem to help much, they're still no-bidding me."
Herber and his neighbors are familiar with wildland hazards. In 2021, the Wyrick Fire burned just miles from their homes. Because Herber saw little change to his insurance rates directly after that event, the sudden non-renewal left him searching for explanations.
"I immediately thought, it's gotta be from the California fires," Herber said, referring to the devastation left behind by the Palisades and Eaton fires in January 2025.
Herber shared his theory with a customer service team member at a State Farm agency office. In an email, the team member wrote, "while I agree insurance companies are trying to recoup losses paid out due to that fire," adding that "they are going to bank when, not if, a fire occurs in certain areas."
When reached for comment regarding the email, a State Farm spokesperson stated that the customer service team member is not employed by State Farm and does not work with rates or actuaries.
"We don't make underwriting decisions in Arizona to offset risks or loss experience in other states," the spokesperson said in a statement to FOX 10.
Long-term insurance carriers are dropping Heber-Overgaard homeowners who have spent thousands of dollars on Firewise property improvements, prompting state committees to consider regulatory action.
Dig deeper:
Back in Heber-Overgaard, Herber is not the only resident experiencing a policy purge. Penny Turner lived in Heber-Overgaard and had been with the same insurance company for 25 years.
"Never missed a payment. Never had a claim," Turner said.
Turner then received a notice in the mail stating her insurance would be dropped if she did not complete specific Firewise measures on her property. While Turner was already performing some of the tasks, others carried significant financial demands.
"Any trees on the lot … branches had to be pruned so they were at least 6-10 feet between the branches and I have two and a half acres with probably 8,000 trees on it, and it would cost me more than my house was worth to have all that done," Turner said.
After paying an estimated $35,000 to $40,000 to her provider over 25 years, Turner wants to see systemic reform.
"We're all dependent on insurance; it doesn't matter where you live," Turner said. "So I really think there needs to be some regulation, more on insurance, because it's such a fine line that they can do this to somebody after 25 years of the same company can just cut you off like that."
Turner noted she is fortunate not to have a mortgage, but she remains concerned about living uninsured and worries about neighbors who may be forced to leave the mountain community.
"They'll have to leave because unless they have cash in their pockets to own their house out right. They won't be able to afford it up here," Turner said.
'We're not doing that area anymore'
Robert Borucki hopes to avoid that outcome after living in the Heber-Overgaard area for nearly three decades. Borucki maintained coverage for more than 20 years before being dropped over a year ago. While searching for new coverage, an insurance company advised him to install a metal roof over his mobile home. Borucki spent roughly $10,000 to complete the installation.
"But it took a few months to get the roof done and by the time we called them they said, 'No, we're not doing that area anymore,'" Borucki said.
Big picture view:
Data from the U.S. Department of Agriculture and the U.S. Forest Service wildfire risk website places the Heber-Overgaard area in a direct exposure area. In 2002, the Rodeo-Chediski Fire burned nearly 470,000 acres in the region and destroyed more than 420 structures.
"It crossed the highway; it jumped the highway right here," said Senior Pastor Eric Woods of Overgaard Baptist Church.
Woods said the church sustained damage in the Rodeo-Chediski Fire but managed to remain insured afterward. That changed in the spring when the church received a cancellation notice.
"I was told that there was a fire study, and it came back negative," Woods said.
Woods emphasized that the church campus actively works to remain Firewise.
"We have adequate spacing for the trees that survived the Chediski fire, we have adequate spacing between them to keep a safe distance and we don't have any ladder fuels, we don't have any smaller trees running up the big ones, so the risk of a wildland fire, it always exists, it always exists, that's why we have insurance," Woods said.
What's Being Done?:
As property owners and local entities received cancellation notices, the state of Arizona formed a Resiliency and Mitigation Council at the end of 2024 to investigate challenges within the homeowners' insurance market.
Michael Newman, general counsel with the Insurance Institute for Business and Home Safety (IBHS), participated in the council. A final report from council members incorporated data from the American Property Casualty Insurance Association (APCIA), which cited a $47.3 billion underwriting loss over the past decade. The APCIA noted that the homeowners' insurance market in Arizona specifically experienced underwriting losses in 2021, 2022, and 2023. The organization also reported that wildfires differ from other natural hazards because a portion of them are caused by human activity.
Discussing potential solutions, Newman pointed to the Wildfire Prepared Home program available in Arizona through the IBHS, which provides specific action steps and a verification process for property owners.
"Once a homeowner goes through that process, they get a designation from IBHS that they can bring to their insurer to demonstrate that they have in fact reduced their risk," Newman said.
Newman also suggested that initiatives like the Resilient Roof Fortified Grant Program, operated by IBHS in states such as Alabama and Louisiana, could be adapted for Arizona.
"Once the grant programs start, it helps catalyze the market where a workforce comes in that helps other people to take these actions," Newman said. "More homeowners hear about these mitigation actions and they want to do it as well."
Newman stated these conversations are taking place across the American West and expressed encouragement regarding local efforts following the 10-month council investigation.
"Arizona has a leg up because they have leaders that get it, that are engaged, that want to help families, want to help communities reduce their risk," Newman said.
State Rep. Selina Bliss, R-District 1, served on an ad hoc committee designated to address house fire preparedness.
"We got an ear full," Bliss said. "We were up in Payson, we started in the Phoenix area, we've got an inch worth of notes here not just from constituents, but also the utility companies."
Bliss noted that some residents inquired about adopting policies similar to California's FAIR Plan, which provides property owners with coverage access when traditional insurers decline.
"We did look into that," Bliss said. "The costs are so high and the coverage is so low, it did not make it practical for Arizona."
Bliss said the state Legislature remains in the data-gathering stage regarding insurance non-renewals but is considering legislation modeled after Colorado policy.
"If you have a non-renewal to extend that period of notification from 60 to 90 days," Bliss said.
Regarding direct mandates on insurance company operations in Arizona, Bliss noted legislative challenges.
"It tends not to go well, so it tends to be a battle at the legislature," Bliss said. "Some members of the legislature don't support bills that tell insurance directly what to do. That's why I like the approach to bring them to the table and say can we just figure out what we can do to benefit the homeowners?"
'The next big obstacle'
Residents express that state action remains their primary recourse.
"At this point, I think legislation is the only thing that's gonna to help, because it's obvious that it's gonna be harder and harder, too, and if we do have a disaster in this area it's gonna be tough, or tougher," Borucki said.
Meanwhile, residents like Herber wait to see how future coverage hurdles develop.
"What are mortgage companies gonna do if people don't have insurance?" Herber said. "I see that as the next big obstacle."
Dozens of other homeowners have contacted Fox 10 after receiving cancellation notices as lawmakers at the State Capitol evaluate solutions. According to the Consumer Federation of America, Arizona homeowners experienced an average insurance rate increase of 48% between 2021 and 2024, representing the third-highest increase in the nation.
Fox 10 also reached out to the Arizona Department of Insurance regarding this issue and received the following statement: "The department is currently conducting a data call to collect transactional-level data for homeowners insurance policies issued in those geographical areas covering residential properties.
What you can do:
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