Senator Gallego Questions Insurance Experts Over Soaring Home Insurance Costs in Arizona

Rocking the boat during a Senate Committee Banking, Housing, and Urban Affairs hearing, Senator Ruben Gallego (D-AZ) grilled insurance experts on the steep rise in home insurance costs plaguing Arizonans. A particular focus was given to homeowners who, despite taking wildfire mitigation measures, found themselves facing eye-watering insurance premium hikes.

Gallego brought to the fore the story of an elderly resident from the small town of Dewey-Humboldt, Arizona. Having put in the effort to reduce wildfire risk by clearing trees and cultivating defensible spaces, she still saw her insurance premium leap from $1,450 to $4,500 annually. According to a statement by Senator Gallego released by his office, "She’s not alone. Across the state, people are seeing their premiums triple or quadruple, if they can find coverage at all. I have heard from people that they have had their coverage just dropped altogether." Homeowners insurance rates in Arizona have risen by 48% between 2021 and 2024, with some policies in wildfire-prone areas being abruptly terminated.

The Senator also reproached the insurance industry for potentially exploiting disasters in neighboring states, such as California wildfires, as a baseless premise to elevate premiums in Arizona – a tactic that's reportedly off-limits. Gallego echoed a common concern for Arizona's homeowners, who, hit hard by natural calamities, find themselves entangled with fraudsters.

In his inquiry, he highlighted a predatory practice known as "assignment of benefits" – a scam where contractors swindle homeowners into signing over their insurance rights and then vanish with the insurance payouts while no repairs are made. "After major disasters, we often see an influx of fraudulent home repair contractors and scam artists pushing what’s called an assignment of benefits, or AOB," Gallego shared, as reported by the Senator's Office. "In these cases, a third party convinces a homeowner to sign over their insurance rights and just takes the claims or just disappears with the money, leaving the homeowner without repairs." Gallego interrogated the insurance experts on measures taken to verify AOB agreements and safeguard consumers from these deceitful tactics, which, in turn, contribute to climbing premiums.