The Arizona Republic
December 31, 2009
By Russ Wiles
Declining real-estate values, continuing lack of natural disasters help keep premiums low
Declining real-estate prices, a scarcity of natural disasters and other factors have helped to keep a lid on homeowner-insurance premiums in Arizona.
Homeowners here paid $634 on average for the most common type of policy in 2007, the most recent year for which data were tracked by the National Association of Insurance Commissioners in a new report. That was well below the $822 average insurance bill paid by other Americans.
Also, Arizona was one of only 11 states where average premiums dipped from 2006 to 2007. "That's directly attributable to fewer losses being incurred by insurance companies here, fewer claims being made and companies passing it along in reduced rates as a result of direct competition," said Ron Williams, executive director of the Arizona Insurance Council.
Residents of states where hurricanes, tornados, earthquakes and other natural disasters are common faced the biggest insurance bills, led by Florida, Texas and Louisiana. Highly urbanized places including Washington, D.C.; New York; and California also had relatively high premiums.
The NAIC cited several factors that affect pricing for homeowner insurance, including natural disasters, dense populations, real-estate values, construction costs and the frequency of mold claims.
Arizona renters weren't as fortunate, with premiums for tenants' insurance averaging $200, higher than the national figure of $182. However, tenant-insurance costs fell on average from 2006 to 2007 in Arizona and most other states, the report said.
Looking ahead, it's unclear what impact the rising number of recently foreclosed-on and abandoned homes in Arizona might exert when the NAIC reports premiums for 2008 and 2009.
"Vacant properties always are a concern because properties that aren't lived in are susceptible to fire, theft and damage," Williams said.
More on this topic
Less expensive in Ariz.
Selected average premiums for the most common type of homeowner policy in 2007, including Washington, D.C.
1. Florida, $1,534
2. Texas, $1,448
U.S. average, $822
40. Arizona, $634
51. Idaho, $422
Source: National Association of Insurance Commissioners
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