Rising Homeowner Insurance Costs in Arizona: Should You Drop Your Coverage?
Homeowner insurance costs are climbing rapidly, and many Arizona homeowners — especially those who own their homes outright — are considering dropping coverage altogether, a practice sometimes called “going naked” or self-insuring.
While self-insuring may be legal, it comes with serious financial risks, especially in areas like Sun City West, Surprise, and greater Maricopa County.
The Surge in Arizona Premiums
- Arizona home insurance premiums have jumped nearly 70% since 2019, one of the steepest increases in the U.S. (AZ Big Media)
- Average premiums are now $2,309/year statewide, with local variation:
- Sun City West: $1,934/year
- Surprise: $2,330/year
-
Phoenix Metro: $3,150/year
(NerdWallet, Bankrate )
What Self-Insuring Really Means
Self-insuring means you do not have a homeowners’ insurance policy. Instead, you personally cover:
- Damage to your home from fire, storms, or other disasters.
- Replacement of personal belongings.
- Liability costs if someone is injured on your property.
If your $400,000 home burns down, you pay 100% of the rebuild cost — plus legal and medical expenses if you’re sued.
Is It Legal to Self-Insure in Arizona?
Yes, Arizona law does not require homeowners’ insurance if you own your home outright. (DIFI Arizona)
However:
-
Mortgages require insurance.
Dropping coverage violates your mortgage agreement and may lead to force-placed insurance at a much higher cost. - HOA rules may also require certain coverage levels.
The Dangers of "Going Naked"
While self-insuring may save money in premiums, it creates massive financial risk.
-
Catastrophic Losses
Rebuilding after a fire or severe storm can cost hundreds of thousands of dollars. - Wildfire & Flood Risk
• Sun City West has a moderate wildfire risk, higher than 57% of U.S. communities. (Wildfire Risk)
• Flooding is rare but not impossible in Maricopa County. -
Liability Costs
If a visitor is injured, you may be liable for medical bills and legal judgments. -
Future Coverage Challenges
If you later seek insurance, premiums may be higher, or coverage could be unavailable in high-risk areas.
Local Perspective: Sun City West & Surprise
Area | Average Annual Premium | Risk Factors |
Sun City West | $1,934 | Moderate wildfire risk |
Surprise | $2,330 | Similar wildfire/flood risk |
Phoenix Metro | $3,150 | Higher rebuild costs |
Source: NerdWallet, Bankrate
Strategies to Reduce Premiums Without Dropping Coverage
- Increase your deductible to lower monthly costs.
- Bundle home and auto insurance for discounts.
- Mitigate risks: install fire-resistant roofing, clear vegetation, and create defensible space.
- Shop around: insurers assess risk differently — compare quotes annually.
- Ask about local/state programs for hard-to-insure homes.
Final Thoughts
Self-insuring may be legal, but it’s not a decision to take lightly. With average premiums under $2,000/year in Sun City West, the cost of coverage is far less than the financial devastation of a catastrophic event. Before you consider going without insurance, talk to a trusted insurance professional to explore all your options.
Disclaimer: This article is for informational purposes only. Consult a licensed insurance professional for advice specific to your situation.


