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The Grand Canyon state is well-known for its rich cultural heritage and natural wonders. It offers residents a sunny climate and a booming job market, which is why it is an attractive place to live. Regardless of the reason you chose to make this state your home, finding good home insurance is a must to serve as a financial safety net in the event that something were to go wrong.
It's also important to remember that Arizona is prone to flooding and wildfires, so having adequate coverage if your home is affected is imperative.
Although obtaining insurance coverage is not a must according to state law, many lenders make it mandatory. If you have been searching the market for a reliable home insurance company, you probably already know that there is a plethora of options for Arizona homeowners.
In this article, we will guide you through the process of obtaining homeowners’ insurance and offer five recommendations to help you make your choice.
Understanding Arizona Homeowners’ Insurance
Homeowner's insurance is a type of insurance coverage intended to safeguard Arizona homeowners from monetary losses and damages associated with their homes and personal property.
This sort of insurance coverage often offers protection from a wide range of potential hazards, such as damage to the building's structure, personal possessions, liability for injuries sustained on the property, and additional living expenses in the event that the home becomes uninhabitable because of an event designated in the policy.
Average Home Insurance Costs in Arizona
The truth is that there are so many factors that influence the cost of home insurance that it can be challenging to determine the precise monthly premium. However, by looking at a few important elements, you can get an idea of what homeowner's insurance will cost you.
Two of the most important things that homeowners’ insurance companies will look at when determining the price of home insurance are the age and condition of the property. If the property has been maintained well, insurance coverage is more likely to be affordable.
According to Value Penguin, the Average cost of an Arizona homeowners’ insurance policy is $1,614 per month. The price you pay will ultimately depend on the state of your property and your risk profile.
There are other factors that also influence the cost of a homeowners’ insurance policy. This includes the following:
- Location
- The replacement cost of the home (cost to rebuild it)
- Any applicable homeowners’ insurance discounts
- Your claims history
- The security features your home has
- Personal property replacement cost
- Your credit score
Keep in mind that most insurers turn to the National Association of Insurance Commissioners (NAIC) for data on applicants before determining a suitable monthly premium.
Because every insurance company is different, rates will vary from one home insurance company to another. This is why it's so important to conduct thorough research before deciding which one to choose. It's also worth mentioning that you should never base your choice purely on cost.
Although an insurance company may offer reasonable policies, you must dig a little deeper to learn more about the coverage being offered, or you could land yourself in hot water when disaster strikes.
Homeowners’ Insurance vs. Landlord Insurance
If you are a property manager, it's important that you understand the difference between homeowners’ insurance and landlord insurance.
Homeowners’ insurance is for those who own reside in their houses, and it covers the property, personal items, liability, and additional expenses. Landlord insurance, on the other hand, is designed for property owners who lease their homes. It covers expenses related to the rental property, income loss, liability, and a number of other tenant-related risks.
The truth is that choosing the right type of insurance coverage is important to ensure that you are protected if something goes wrong. It's also important to be open and honest with your insurer to avoid having your claims denied. Let's look at some of the instances when homeowners’ insurance is the preferable option:
Vacant Property
Suppose your property is not currently occupied, and you will not have tenants staying there. In that case, it's a good idea to have homeowners’ insurance to ensure that any possessions stored there are protected. However, it's important to be open and honest with your insurer about the present state of the home, as this might have an effect on your coverage.
Temporary Absence
Situations may arise where you have to leave your property vacant temporarily to take care of business or visit family overseas. Whatever the reasons for your short-term absence, homeowners’ insurance is often preferable. However, it's a good idea to check with your insurance company to ensure that you have the right kind of coverage to protect your assets while you're away.
Transition Period
A transition period is essentially a time when the homeowner decides to reside on their rental property between tenants. During this time, it's often best to have homeowners’ insurance to ensure that you are covered if something goes wrong while you are residing on the property.
Home Sharing
In arrangements where a homeowner lives in their home but chooses to lease a portion of it, homeowner's insurance is often the better option. However, it's important to remember that every insurance company is different, so it's important to be upfront about your living situation and obtain advice from your insurer about the best option and what each one offers in terms of coverage.
If you are earning rental income from the arrangement, landlord's insurance may be preferable, as you will be covered for any lost income. Liability coverage is important for those who opt for home sharing, as it protects against accidents, injuries, damage to property, and legal claims.
How to Choose an Arizona Homeowners’ Insurance Company
If homeowners’ insurance is indeed what you require for your home in Arizona, you will need to find a reliable home insurance company. What do you look for when deciding which one to go for? You must first consider your unique needs.
Unique Policy Needs for Arizona Homeowners’ Insurance
Arizona is known for its warm climate, but because of rising temperatures caused by global warming, in combination with a number of other factors, many areas in the state are prone to wildfires. The state is also prone to winter and monsoon storms that lead to flooding. These natural disasters can cause serious damage to your property, which is why it is important to ensure that you are covered.
In the section below, we'll talk about some of the unique needs that Arizona homeowners have.
Flood Insurance Coverage
Flood insurance is definitely worth considering due to Arizona's high risk of flash floods. Keep in mind that conventional home insurance coverage does not cover flood damage. You will almost always need to acquire an additional flood insurance policy.
However, some insurance companies might provide flood insurance protection as an endorsement. Although this kind of coverage is optional, if you reside in an area susceptible to flooding and have a mortgage, you might be required to acquire flood insurance.
Wildfire Coverage
Thanks to a combination of variables, several locations in Arizona are prone to fire hazards during wildfire season. These factors include wind patterns, the density of vegetation density, climatic conditions, the area's proximity to wildlands, and more.
Fire damage is normally covered as a common risk by homeowners’ insurance, but if you reside in a particularly high-risk location, you may want an additional policy for more extensive coverage against fires.
Sinkhole Coverage
Certain areas in the state may be prone to sinkholes, so it's worth considering this kind of coverage if you live in an area that is prone to sinkholes. As with floors and wildfires, homeowners’ insurance in Arizona doesn't typically cover sinkholes, so you will need to obtain separate coverage.
Mold and Water Damage
The same torrential downpours that cause flash floods can also overwhelm your drain lines and sewers, which can cause them to overflow into your home. Water backup insurance will pay for any damages caused by water overflowing and entering your property.
Where there is water, there is often mold damage. It can reduce the quality of the air in your home and lead to a number of health disorders if left unchecked. Although many insurers will cover mold damage if it is the direct result of a covered event, in many cases, you will need to acquire additional coverage.
Other Factors to Consider When Assessing Arizona Homeowners’ Insurance Companies
Once you have determined what your needs are, you can follow these steps to find a reliable home insurance company in Arizona:
- Define your needs. If you haven't already done so, you will need to start by determining the value of your home, along with the kind of coverage required. Looking at the history of natural disasters in your area is advisable to help you determine which additional policies you may require.
- Do some research. Investigate home insurance providers by visiting their websites, reading online reviews, and learning more about their reputations. Look for organizations that have a history of handling claims quickly, providing outstanding customer support, and receiving positive comments from policyholders. It's also a good idea to talk to friends and family to identify reliable insurance providers.
- Examine the coverage being offered. Before choosing a company, examine the coverage being offered and compare it to your requirements. Consider whether the standard coverage will be comprehensive enough to meet your needs. If not, enquire about additional policies.
- Look at the cost. Cost is undoubtedly an important consideration, so be sure to compare the prices of coverage from several different companies. Keep in mind that the least expensive option might not offer the amount of coverage you seek.
- Consider the financial stability of the insurance company. When obtaining insurance coverage, it's important to check whether the insurer you're working with is financially stable. To do this, you can look at ratings from independent agencies such as Moody's Investor Service, Demotech, and A.M. Best Company.
It's also a good idea to assess the customer service the insurer offers, inquire about discounts, and review the policy before you make your final decision. To help you, we have shortlisted a few candidates, which we will talk a little more about in the next section.
Best Home Insurance Companies in Arizona
Without further ado, here are the top five home insurance companies in Arizona:
1) Lemonade
Lemonade Insurance Company, founded in 2015, is a newbie to the homeowners' insurance sector. It offers basic coverage to ensure that homeowners are covered in the event of an accident. The Lemonade app lets customers obtain a quotation, make policy changes, and submit an insurance claim quickly and easily. Plus, it uses artificial intelligence to process 30 percent of claims immediately.
It claims the number one spot on our list for its overall ease of use, attention to detail, fast claims processing, and affordability.
Coverage and Features
One of the most notable features of this incredible insurer is its ease of use. Suppose you're the kind of person who hates having to stay on the phone for several minutes talking to a representative. In that case, you'll be happy to know that Lemonade offers quick quotes via the app, and thanks to a fast sign-up process, you can get coverage for your Arizona property in just a few minutes.
Here's what Lemonade offers:
- Dwelling coverage (covers the cost to repair or rebuild your home after a covered event)
- Coverage for other structures on the property
- Liability coverage (options range from $100,000 to $1 million)
- Loss of use (covers costs when a person cannot live in their home because of a covered event)
- Personal property coverage (you can choose from 40 to 80 percent of your dwelling coverage amount)
- Medical coverage (this coverage pays for injuries sustained on your property)
There are also additional policies you can take to ensure that your valuables are protected. This includes jewelry coverage and extra coverage that will insure your cameras, fine art, musical instruments, and more.
Discounts
Lemonade also offers a number of discounts that can help you save money on your insurance policies. This includes the following:
- Bundling discount - Purchasing more than one policy from the company can help you save money. If you purchase home and auto policies from Lemonade, for example, you could save on your overall monthly premium.
- Material discount - You can save if your home is constructed using fire-resistant materials.
- Protection equipment discount - Does your property have a security system? You can lower your monthly premium if you have burglar alarms or cameras installed.
- Fire protection discount - If you have a fire extinguisher or a sprinkler system installed, you can expect a discount on your homeowners' insurance.
- Gated community discount - There's strength in numbers, so if you live in a gated community, expect to receive cost-saving benefits.
2) State Farm
With a good reputation and track record, State Farm is another great choice if you're looking for comprehensive coverage. Since its inception in 1922, it has become the largest insurance company in the United States.
Coverage and Features
State Farm provides a number of additional coverage options to its homeowners' plans in addition to the base coverage.
As long as you've covered your property for at least its estimated replacement cost, the "increased dwelling limit" will raise your dwelling coverage by up to 20 percent. You will not be charged anything to add this to your insurance.
Here's what State Farm will cover you for if you go with a standard homeowners’ insurance policy:
- Loss of use
- Personal property
- Dwelling coverage
- Other structures
- Personal liability
- Medical payments
There are also a number of additional policies that you can include, depending on your needs. This includes coverage for utility lines, identity fraud, earthquakes, and many more.
Discounts
The truth is that State Farm doesn't offer as many discounts as Lemonade. You can get a discount if your home is constructed from certain materials, such as impact-resistant roofing tiles. The company also offers discounts for security systems.
3) Chubb
If you're looking for a reputable and financially stable insurance company, then Chubb is yet another great option to consider. With a long-standing reputation, it is the choice of many for home insurance in Arizona.
Coverage and Features
One of the reasons we like Chubb is that many of its standard features are add-ons for other insurers. You also get outstanding customer service, which is another great reason to choose Chubb. Let's look at some of the things you will be covered for with a standard plan.
- Personal property (Chubb pays the cost to purchase new items, unlike most homeowners’ insurance companies that cover the value of the old possessions)
- Dwelling
- Other structures
- Personal liability protection
- Loss of use
- Medical payments
- Water backup coverage
- Extended replacement cost
Discounts
Many of Chubb's home insurance discounts are centered on safety. It reduces your premiums if your residence has a sprinkler system or other fire resistance features. You can also expect a discount for having burglar or fire alarms. Adding a smart leak detector that switches off your water supply if it detects a leak could also earn you a nice reduction on your insurance premiums.
Furthermore, if your property is new or recently remodeled, you can save money, and residing in a gated community also grants you a price cut. Other incentives may be available based on your location, so it's best to consult Chubb directly for more information.
4) Amica
Amica was established in 1907 and offers a wide range of coverage options for homeowners in Arizona.
Coverage and Features
Amica's Standard Choice insurance covers your house and any additional structures on the premises, as well as personal items and expenses related to temporary accommodation in the event of a loss that renders the property briefly uninhabitable. You can also opt for additional protection against equipment damage and water backup coverage.
The Amica Platinum Choice policy contains all of the regular policy's protections as well as certain extras. These include increased coverage for repairs or rebuilding, as well as additional protection for certain types of property, such as jewelry. Other benefits include protection against credit card fraud and damage to business property.
Discounts
Here are some of the discounts policyholders may qualify for:
- Discounts for no claims
- Security system discounts
- Signing up for autopay
- E-discounts if you sign up for electronic documents
- Discounts for new or newly remodeled homes
- Loyalty discounts
- Signing up for different types of policies
5) Allstate
Allstate is an Illinois-based insurance company that offers a wide range of insurance coverage options for homeowners in Arizona.
Coverage and Features
As part of its standard coverage, Allstate offers the following:
- Loss of use
- Personal property
- Dwelling coverage
- Other structures
- Personal liability
- Medical payments
Identity theft, water backup coverage, home sharing, and phone protection are all optional extras.
Discounts
Allstate offers a number of opportunities for homeowners to save money. This includes a 25 percent discount for bundling car and house insurance policies, as well as a 20 percent discount for new clients who have not made any recent claims with their previous insurance carrier. Switching to Allstate might result in a 10 percent discount, as well as an annual 10 percent loyalty discount.
Other Notable Arizona Home Insurance Companies
In addition to these companies, here are a few others that might be worth considering:
- Liberty Mutual
- Travelers
- American Family Insurance
- Nationwide
- Progressive Insurance
- Farmers Insurance
Conclusion
When you live in a state that is prone to flooding and wildfires, ensuring that your biggest investment is protected is imperative. However, with so many insurers on the market, having clear guidance on which one to choose can make a big difference.
Be sure to consider your unique needs and your property's risk factors when making your decision, and spend enough time on research to ensure that you're not left disappointed when something happens and it's time to cash in on your insurance policy.
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