Arizona home insurance nonrenewal: your rights

Arizona's notice rules

Arizona's rules for homeowners nonrenewals are in Title 20 of the Arizona Revised Statutes. Under A.R.S. 20-1653, an insurer that will not renew must mail written notice at least 30 days before the policy expires. Under A.R.S. 20-1654, the notice must state the specific reasons, with enough facts that you can understand them. A line like "underwriting guidelines" is not the kind of reason the law has in mind.

A chance to fix property conditions

One of the most useful Arizona rules is in A.R.S. 20-1652. If a nonrenewal is based on the condition of the home, the insurer must give you 30 days' notice to fix the identified conditions. If you fix them, the policy must be renewed. If they are not fixed well enough, you get another 30 days, on payment of premium, to finish. If you think the decision is arbitrary, you can appeal under A.R.S. 20-1633. Common examples are a roof in poor repair, a damaged fence around a pool, overhanging trees or debris.

If your notice names a condition:

1. Ask the insurer in writing exactly what it wants fixed and by when.
2. Get the work done or scheduled, and get a contractor's written statement.
3. Send photos and receipts to the insurer and keep copies.
4. Ask the insurer in writing to confirm the policy will renew.

Your right to object

Arizona lets you challenge a nonrenewal. Under A.R.S. 20-1633, you can file a written objection with the Department of Insurance and Financial Institutions within 10 days of receiving the notice. The department can review whether the nonrenewal follows the law. Because the window is short, do this first if you think the notice is wrong, then keep shopping while you wait.

What drives Arizona nonrenewals

Reasons vary by insurer and by home. In Arizona, homeowners commonly hear about roof age and condition, monsoon wind and hail damage, water losses, and wildfire exposure in forested and high-desert communities. The best clue is your own notice. Because Arizona requires specific reasons, use them as a to-do list.

If wildfire is the reason, defensible space and home hardening help. The IBHS Wildfire Prepared Home program offers a certificate some insurers recognize. Ask each company you apply to whether it gives credit for it.

Arizona has no FAIR plan

Arizona does not have a state FAIR plan. It is not listed among state plans on the PIPSO member list. If standard insurers decline your home, the next option is the surplus-lines market, where a licensed broker places coverage with an insurer that is not admitted in Arizona. The Arizona Surplus Lines Association, at (602) 279-6344, can explain how that market works.

Surplus-lines policies can cost more and the forms vary. They are not covered by the state guaranty fund in the same way as admitted policies. Read the deductibles, exclusions and whether the policy pays replacement cost or actual cash value.

A sensible order of steps

1. Object if needed. If you think the notice breaks the rules, file with DIFI within 10 days.
2. Fix what you can. If the reason is a curable condition, fix it and ask to keep the policy.
3. Shop through independent agents. They can quote several Arizona insurers at once.
4. Go to surplus lines if needed. Compare at least two quotes if you can.
5. Keep your lender informed. Let your mortgage servicer know before the policy lapses.

Flood after monsoon storms

Homeowners policies do not cover flood. In Arizona, monsoon storms can flood washes and low streets quickly, even outside mapped flood zones. Check your address on FEMA's Flood Map Service Center and ask your agent about flood coverage.

Keep a paper trail

Arizona's rules work best when you can show what happened and when. Keep the envelope or email showing when the notice arrived, copies of every letter you send, contractor invoices and dated photos. If you file an objection with DIFI, attach them. If you shop, send the same file to each agent so underwriters see the full picture at once.

Before you sign a new Arizona policy

Read the declarations page and the endorsements, not just the price. Check whether the roof is covered at replacement cost or actual cash value, what the deductible is for wind and hail, and whether water damage has a lower limit. Ask the agent to explain any change from your old policy in writing.

When to call DIFI

Call DIFI at (602) 364-3100, or Consumer Protection at (602) 364-2499, if your notice came late, lacks specific reasons, or the insurer will not let you fix a condition. To talk through replacement options, call us.

Not sure what your letter says? Use the notice decoder. Roof the problem? Read roof-age rules. Other states: all state guides.

Sources

• A.R.S. 20-1653, Notice of nonrenewal
• A.R.S. 20-1654, Specific reasons
• A.R.S. 20-1652, Cancellation and nonrenewal limits
• A.R.S. 20-1633, Objection to the director
• Arizona Department of Insurance and Financial Institutions
• PIPSO member plans