Flagstaff, county homeowners share stories of insurance anxiety, rejections and rocketing costs

Following the Coconino County Board of Supervisors' most recent discussion about wildfire and homeowners insurance on Sept. 30, the Arizona Daily Sun asked readers to share their stories of searching for affordable insurance in an increasingly unaffordable market.

In the conversations that followed, residents described blanket rejections, soaring prices and anxiety about an uncertain future -- for themselves, and for younger generations hoping to put down roots in the area by buying a home.

Here's what we heard.

Rejection by address

Kathy Gimenez is a retired real estate agent who lives with her husband in Westwood Estates, just outside Flagstaff's city limits.

The couple bought their current house 10 years ago, and it was already equipped with a metal roof and concrete siding -- both of which significantly reduce the chance of ignition by embers.

The community is diligent about pine needle removal and disposal, Gimenez said, as well as removing low-hanging tree branches, which could be ignited by a ground fire. She'd never had any difficulty getting homeowners insurance until February of this year, when she received a notice of nonrenewal from her old carrier.

"We had a month and a half of anxiety," Gimenez recalled.

She spoke to around 20 brokers, but most of the conversations were brief: they'd ask for her address, type it into an internal system and then say, "Sorry, we cannot give you any insurance."

"Out of 20, we got three [offers]," she said.

Previously, her homeowners insurance cost around $7,000 annually. The new offers ranged from $18,000 to $29,000 for one year of coverage.

Ultimately, she and her husband secured a policy for $10,000 annually -- still an increase over their old policy, but well below the other quotes.

Receiving so many categorical denials was frustrating and frightening, Gimenez said. As far as she could tell, none of the safety features of her house or improvements to defensible space mattered at all to the companies she was contacting.

"You can't fight an immediate rejection because of somebody looking you up on a map," she said.

And there seemed to be little apparent logic in carriers' decisions: the same provider who insured Gimenez's house refused to write a policy for a neighbor two months later, she said.

Mark Edwards, another Westwood resident and a retired business attorney, recounted similar experiences talking to insurance agents. His premiums have tripled over the past two years, rising from about $2,600 annually to $8,300.

"It wasn't until two years ago that it really became a problem," Edwards said. He tried shopping around for a new policy, but without success. "I could find nobody -- online, by phone, any of the brokers in town -- that would write in this area at all."

Like Gimenez, he found that most of the discussions didn't progress beyond his home address.

"They had just redlined the area," Edwards said. "That address, no, we won't write. That was the beginning and the end of each of those conversations."

Although Edwards hasn't had a policy canceled, he's worried about what the future could bring. His neighborhood recently began trying to regain its Firewise certification status, but he also admitted, "I don't know if that means something to the insurance companies or not."

"If it gets so expensive here … what is our threshold of pain on the insurance?" Edwards wondered. "I don't want to put $2,000 a month away just for insurance."

Although he and his wife originally bought the property as a second home 13 years ago, it's now their full-time residence.

"This is our dream home," Edwards said.

He could see the Ponderosa pines out the window, he added -- a beautiful sight, even though the proximity of the forest is the most likely reason for the increase in his premiums. "This is what I wanted. Hard to think of giving it up."

Paul Baze moved back to Flagstaff in 2023 when his wife got a new job as a professor at Northern Arizona University. The couple had lived in Flagstaff before and spent the intervening years in Texas and in Tucson. They found a house they loved on the east side, near Silver Saddle Road and Highway 89.

When they first went under contract for that house, they received a "dirt cheap" quote for homeowners insurance, Baze said. But the deal fell through when they couldn't sell their Tucson property on schedule. A month later, they were able to re-bid on the house, only to learn that the insurance company that had offered the previous quote would no longer insure it for any price.

Their agent, Baze said, showed them a copy of an internal memo describing their house as located in a "fire exclusion zone," or "firelined." It was the beginning of a nearly fruitless search.

"I ended up talking to every major insurer," Baze said. "Essentially, every single one of them outright said, 'Give us the address before we have any conversations.'"

And once he did? "All the big insurance companies said no."

"The one thing we were thinking was, 'We can't afford this house,'" Baze recalled.

Eventually, with the assistance of a local agent, he and his wife were able to find a carrier who would insure their house if they also switched their car insurance. The bundled price, he said, is "somewhat reasonable."

Baze's mother lives near Flagstaff, and he wants to stay here.

"Flagstaff forever will be my home. I was born and raised here," he said.

But now he worries about receiving a nonrenewal notice. He has continued to look for a more favorable rate.

"I did search around; I did shop around," Baze said. But his efforts, including sending photographs of his property to different companies, didn't lead to any helpful results: "I did a whole bunch of work for then a 'No' to come," he said.

For now, he's resigned to the current situation. "We'll try to find a way to make it work," he said.

Brad Thomas lives on the west side of town in the Flagstaff Ranch Golf Club. A former employee of W.L. Gore and Associates, he moved to this area eight years ago when his daughter -- also residing here -- had her first child.

Before moving, he lived in New Hampshire.

"No problem with insurance there, in the middle of nowhere, in the middle of woods," Thomas said.

He'd spent over 40 years with the same homeowners insurance provider and filed only a single claim in that time. But in 2023, the company refused to renew his policy.

"Then it became a chase," Thomas recalled. "It was horrible."

He got a new policy from a different company at double his past premiums, only for that company to cancel his coverage three months later. He repeated that experience with a third company and finally secured a seemingly stable policy with a fourth company -- albeit at triple his old rate.

"Just a month ago I tried again, through five different, six different [companies], and no one -- no one -- will do anything," Thomas said.

His neighborhood, he noted, complies with Firewise USA standards.

"We do everything we can, and the cool thing is the community's all in," he said.

The residents talk regularly with the Flagstaff Fire Department, Highlands Fire District, and Ponderosa Fire District about maintaining defensible space and mitigating fire risk.

But, he said, "It doesn't matter. Doesn't matter what you do." The insurance companies "have algorithms that have nothing to do with life. … We dance through hoops for Firewise. They don't care."

Like Baze, he's concerned by the ever-present prospect of another abrupt nonrenewal.

"We're worried about sitting on a million-dollar property and not having it covered," Thomas said. Without any reason or explanation for companies' past decisions, he doesn't know what else he could possibly do to make his property more appealing to insurers. "We keep asking those questions in our fire district meetings, and there's no answers."

He doesn't blame the firefighters for that, he added: "Chief [Todd] Miller at Highlands has been an excellent resource for us, but he's as frustrated as we are."

And until insurers disclose the data behind their decisions, answers are unlikely.

"I don't know what their algorithms are, because each company's different," Thomas noted. "But they won't share it."

The reinsurer effect

The Arizona Daily Sun also spoke to two local insurance agents about the factors driving the rise in premiums and increasing frequency of nonrenewals.

Eric Boatner, who has lived in Flagstaff for 30 years, addressed the Flagstaff City Council about his concerns over rising insurance rates two years ago. (Boatner is an Allstate agent, but spoke then and now only on his own behalf, not for the company.)

Around two years ago, Boatner said, reinsurance companies -- which insure the insurers -- reevaluated their own risk tolerance.

"It impacted the industry," he said. "Because everyone buys catastrophe insurance from these companies."

With reinsurers taking a more conservative position, the insurance companies homeowners deal with also had to reduce their exposure.

That change, Boatner said, was the reason "we all saw our premiums jump up. Double, or even triple."

Although the price impacts were conveyed downward to customers, the underlying risk evaluations weren't.

"These corporations … they have people who rate the risk, but they're not having any dialogue with the consumer," Boatner said.

Dan Hakes, an independent insurance agent who works in Flagstaff, also noted the influence of reinsurers "pulling their purse strings tighter." But there's more to the picture, he said.

One of the other important factors is that as the cost of construction materials and labor have risen in recent years, the potential cost of rebuilding a lost home has surged.

"What it used to cost to build a home in this town has doubled and tripled," Hakes said.

Not too long ago, according to Hakes, the cost of residential construction here averaged around $170 per square foot. Now, that figure is up to about $350 per square foot. Rising premiums are one way that insurers are trying to protect themselves from that higher potential cost.

When it comes to nonrenewals, Hakes said carriers are now relying on "wildfire scores," which can vary from one provider to another and are considered proprietary.

"I can tell you that with the couple dozen carriers that we work with, every one of them, the first thing they look at is wildfire score," Hakes said.

And mitigation efforts carried out by homeowners don't factor into those scores -- hence why Gimenez, Edwards and the other homeowners who spoke to the Arizona Daily Sun described flat refusals based on their address alone.

"Inflation's taken a toll, the wildfire scores have taken a toll, and of course our weather patterns aren't helping us," Hakes said, citing the ongoing drying of the American southwest that scientists have characterized as a "megadrought."

Insurance providers are more risk-averse now than at any other time in his 25-year career, Hakes said. But that doesn't mean there aren't options available for homeowners.

"The only thing you can do is keep looking for carriers that will accept higher risk," he said.

There are more than 800 insurance providers approved by the Arizona Department of Insurance, he pointed out: "There's still a lot of carriers, and a lot of availability. It's just hard to find them sometimes. It takes time and effort to do that."

And the price might not be what a homeowner wants.

Concerns for the future

Besides the immediate difficulty of obtaining affordable insurance -- or any insurance at all -- everyone the Arizona Daily Sun spoke to expressed fears about longer-term consequences.

"I was lucky enough to go to school, get a degree. I work for a really good company, and my wife's a professor," Baze said. "We kinda have the privilege of being able to afford the homeowner's insurance and mitigation efforts. But my mom, she lives in a mobile home out in the country, so she just doesn't have homeowners insurance. Never has, and probably won't."

"It's just, essentially, gentrification," he continued. "If you can't afford to insure your house and there's a major event, you're forced out, and somebody with more money comes in."

Boatner, similarly, said, "We're seeing the middle class get squeezed out of Flag."

"I raised my kids here. I'd like to see them stick around," he said. "But cost of living might prohibit that."

Thomas, whose daughter already lives in Flagstaff, said he was concerned for the next generation, too.

"Water's going up. Insurance is going up," he said. "You can't live in a house in Flagstaff and not have it insured. … That's a huge risk. This place is expensive as hell."

Multiple people noted that if the cost of insurance continues to rise, they might be forced to sell their house -- but also, they might not be able to find a buyer if nobody else can secure a policy either.

As Baze acknowledged, "If we can't find it, somebody else probably can't."

Across the forested regions of Arizona, from Flagstaff to the White Mountains, Edwards said, "a lot of homeowners are going to be up in arms if the value of their homes plummet or they become unsalable because of insurance issues."

Gimenez, who was a real estate agent before her retirement, said, "I feel very strongly that if it keeps on growing, it's going to kill the real estate market, because people with mortgages have to have fire hazard insurance."

Hakes mentioned the same thing. "If you can't find a policy that fits your debt to income ratio, then you can't get a loan," he said. "It certainly affects affordability, and ability for people to buy homes."

So what is to be done?

Nobody the Arizona Daily Sun spoke to was certain. "I don't know what else to do" was a common refrain, and almost everyone expressed frustration over the helplessness they felt as they navigated denial after denial or price hike after price hike.

"It's a really complex problem," Baze said. "But it's only complex because there's a select number of very wealthy individuals that profit off of the insurance industry as a whole."

If insurance is going to remain a requirement for mortgage lending, he added, the government needs to regulate the market more closely -- "the strongarm approach," as he called it.

Thomas, similarly, said there should be "some stipulations" on the insurance companies -- although he admitted, "I wouldn't know what to ask for."

"There's no one reining in insurance companies," he added. "I think it's sinful. I do."

Others were worried that aggressive regulation by the state of Arizona could cause insurers to leave the market entirely, as has happened in California.

"If they try to control the pricing," Boatner said, referring to the Arizona Department of Insurance, "then [companies] won't write here."

Gimenez suggested an approach to regulation that could better reflect residents' mitigation efforts: Require insurers to inspect a property in person before making a decision on whether to provide coverage there.

"If that doesn't help with the problem," she said, "then the state has to come up with some kind of subsidy insurance that people can go to and obtain" -- an insurance plan of last resort, even if it's expensive.

Hakes suggested homeowners might need to accept less-favorable policies.

"As a whole, we all need to self-insure to higher limits -- meaning take higher deductibles," he explained. "Because the less claims activity we put on carriers, the less need they have for increasing premiums."

Others discussed potential new technologies that could help protect homes during a fire. But generally, everyone agreed that there was no clear short-term solution.

Boatner said he was at least encouraged by the cohort of proactive and innovative fire professionals in the Flagstaff Fire Department and in the county's other fire districts.

He would like to see the reinsurance companies brought into discussions between fire professionals, state regulators and insurance carriers, and still believes a mutually beneficial solution is possible.

"We do have the backing and the pieces in place to figure this out," he said. "We just need to make sure we're having the right conversation with the right people."