By Alex Gonzalez
Insurance premiums have gone up a lot and according to a new report, Arizona is one of the states where homeowners are being hit hardest.
The Consumer Federation of America's latest report found from 2021 to 2024, annual insurance premiums for a typical Arizona homeowner increased by more than $700.
Diane Brown, executive director of the Arizona Public Interest Research Group, called the situation dire and fears the severity and increasing frequency of wildfires plaguing the state could only exacerbate the problem. She called the report "a wake-up call for consumers and policymakers across the nation."
"Policymakers should recognize it is no accident that wildfires are contributing to increased insurance costs," Brown urged. "And should not accept claims by the utilities that they should be left off the hook for basic legal responsibility."
Arizona lawmakers are currently debating a bill to protect utilities from wildfire-related lawsuits and could have the unintended consequence of shifting the burden of wildfire claims from utilities onto homeowners' insurers.
Brown argued the approach is wrong and if found negligent, utilities should have to cover costs to those affected. Many Arizonans have seen their rates skyrocket this year or have been dropped from coverage altogether as insurance companies try to recover losses.
Doug Heller, director of insurance for the Consumer Federation of America, pointed out there is not a "strong culture of rate review in Arizona." He said insurance companies will take advantage of the places in which advantage is allowed.
"Arizona needs to step up and be more aggressive in its inspection of the insurance companies' rates," Heller emphasized. "In Arizona, as in other parts of the West, to be honest, it's all around the country, the wildfire risk has increased with climate change, there is no question about that."
Heller added it is going to take a "concerted effort" to get things on the right track. The report recommended requiring insurance companies to release data on pricing, coverage and claims annually, for federal and state governments to expand grant-based and loan risk mitigation programs as well as the creation of a "reinsurance program" to stabilize the market.
Experts advised homeowners to shop around for the best rates and also maintain homes by utilizing vital fire-reduction measures.
