Last updated: May 24, 2025

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OfferMarket is not NMLS licensed in Arizona. To serve real estate investor clients in Arizona, we operate as a rate shopping service and process your loan with the most competitive licensed capital provider on our platform.

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Landlord insurance in Arizona is a specialized form of insurance tailored for owners of rental properties across the Grand Canyon State. Whether you have a single rental in Phoenix or manage multiple properties in Tucson or Flagstaff, landlord insurance Arizona is an essential safeguard for your investment and financial security.

Unlike standard homeowners insurance, landlord insurance policies in Arizona are designed specifically for rental property risks and needs. Understanding the key components of landlord insurance Arizona—and how to get the best value—can protect your rental income and property from unexpected events.

Insurance costs in Arizona have climbed significantly, with premiums increasing by more than 25% over the past 18 months. This rise directly impacts your rental property’s profitability. At OfferMarket, we analyze thousands of landlord insurance Arizona policies every year through our private lending and insurance review services. We often find landlords paying nearly 27% more than necessary based on lender mandates and risk tolerance.

Many Arizona landlords rely on local insurance agents who may not specialize in landlord insurance Arizona. These agents can inadvertently recommend pricier policies since their commissions are tied to your premium amount. Even well-meaning agents sometimes lack access to the most competitive offers because they represent a limited number of carriers or don’t focus on landlord-specific coverage.

To tackle this, OfferMarket Insurance created a platform where Arizona rental property owners can compare quotes from over 40 insurance providers quickly. In less than a minute, you can find landlord insurance Arizona policies optimized for coverage and price. Our team vets each quote, ensuring you get comprehensive protection tailored for Arizona’s rental market at a competitive rate. Every month, we help landlords save thousands, and we’re excited to help you discover your potential savings!

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What risks does Landlord Insurance Arizona cover?

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A thorough landlord insurance Arizona policy typically includes these core coverages:
🏠 Property insurance specific to Arizona properties
⚖️ General liability insurance to protect against injury claims
💸 Business interruption insurance for loss of rental income
🌊 Flood insurance (required if your Arizona property lies in a flood zone; usually a separate policy)

Property Insurance

Arizona landlords face unique property risks, including fire hazards during dry seasons, monsoon storm damage, and potential tenant-caused damage. Property insurance covers physical damage to your rental and can also reimburse temporary housing costs for tenants if the home is unlivable due to repairs.

There are three main property insurance “forms” in Arizona landlord policies: Basic Form, Broad Form, and Special Form, each covering different perils or risks.

Basic Form Perils

The most affordable Arizona landlord policy covers fundamental risks such as:
🔥 Fire (a significant concern during Arizona’s wildfire seasons)
🌩️ Lightning strikes, which occur during summer monsoons
💥 Internal explosions

Extended Coverage (EC) Perils

In Arizona, you can add extended coverage to your basic policy, remembered by the acronym WCcSHAVVER:
🌬️ Windstorm (including monsoon winds)
🦹‍♂️ Civil commotion
🔥 Smoke damage (not related to fire but sudden)
🌨️ Hail damage (common during Arizona’s storm season)
✈️ Aircraft-related damage
🚗 Vehicle impact
🌋 Volcanic action (rare but included)
💥 Explosion
❗ Riot

The V&MM coverage protects against:
🏚️ Vandalism (especially important in urban areas like Phoenix)
🦹‍♂️ Malicious mischief

Broad Form Perils

Arizona landlords can upgrade to Broad Form for additional protections, using the acronym BIG AFFECT:
🥷 Burglary damage
🧊 Ice, sleet, snow weight (less common in most parts of Arizona but possible in northern areas)
🪟 Glass breakage
🚰 Accidental discharge of water or steam
🧊 Freezing objects (important for northern Arizona’s colder climate)
✈️ Falling objects
⚡ Electrical current damage
🏚️ Collapse
💥 Tearing asunder

Special Form Peril

Special Form, also known as DP-3 in Arizona, offers the most comprehensive coverage by protecting against all risks of direct physical loss except those specifically excluded. This includes many natural and manmade hazards typical to Arizona’s environment, except for:
🌊 Flooding (separate flood insurance needed, especially near rivers or canals)
🌎 Earthquake (may require an additional endorsement, as Arizona has seismic zones)
🤡 Intentional damage
⚠️ Building code enforcement costs
🔌 Power outages occurring off the premises
🇺🇸 Government seizure

General Liability Insurance

In Arizona, general liability insurance is a vital component of landlord insurance, protecting property owners from legal and medical costs if someone is injured or their property is damaged on your rental premises. Whether you own a small duplex in Scottsdale or a larger multi-family property in Mesa, liability coverage shields you from costly lawsuits.

Typical Arizona landlord insurance policies cover liability limits ranging from $100,000 up to $1,000,000 per occurrence, and an aggregate limit between $1,000,000 and $2,000,000 annually.

For instance, if a tenant trips on uneven pavement outside your rental in Tucson and requires medical treatment, your landlord insurance Arizona policy will cover these expenses along with legal defense costs. Similarly, if a contractor suffers an injury while repairing your property, liability insurance provides financial protection.

Business Interruption Insurance (Loss of Rent)

Arizona landlords also face potential loss of rental income if a covered event—such as a storm-related fire or water damage during the monsoon season—renders the property uninhabitable. Business interruption insurance included in your landlord insurance Arizona policy compensates you for lost rental income during repair periods.

This coverage is usually affordable, often costing about $1 per $1,000 of annual rental income. For example, if your Arizona rental generates $30,000 per year, business interruption insurance might add roughly $30 to your annual premium.

Flood Insurance

Certain areas in Arizona, such as parts of Phoenix’s Salt River floodplain or flood-prone sections of Yuma, require flood insurance if your rental property falls within a FEMA-designated Special Flood Hazard Area (SFHA). Flood insurance is a separate policy that lenders require when a flood zone is confirmed via flood certification.

If your Arizona rental is located in a flood zone, most lenders will insist on flood coverage up to $250,000 or more. The National Flood Insurance Program (NFIP) typically provides flood insurance, and premiums depend on your property’s exact location and flood risk.

Misunderstandings about flood insurance requirements versus landlord insurance coverage are common in Arizona’s real estate market, so it’s crucial to understand the differences and ensure you’re adequately protected.

Landlord Insurance for DSCR Loans in Arizona

Are you financing your Arizona rental property with a Debt Service Coverage Ratio (DSCR) loan? DSCR lenders have strict insurance requirements that may be challenging to meet without an insurance agency specializing in landlord insurance Arizona.

Your insurance premium directly impacts your DSCR calculation, which affects how much financing you qualify for. To optimize your cash flow and secure the best loan amount, it’s essential to obtain cost-effective landlord insurance Arizona policies.

Use our specialized DSCR and cash flow calculators designed for Arizona rental investors to see how insurance premiums influence your loan eligibility and net income.

DSCR Loan Insurance Requirement	Required for Arizona Rental Properties
Property Insurance	Yes
General Liability Insurance	Yes
Business Interruption Insurance (Loss of Rent)	Yes
Mortgagee Clause	Yes
Lender as Additional Insured	Sometimes

How much does landlord insurance Arizona cost?

Several factors unique to Arizona influence landlord insurance pricing:

Location

Arizona’s insurance actuaries analyze historic claims data specific to the city or county where your rental is located. Costs for labor and materials to repair storm or fire damage also vary. For example, premiums in Phoenix might differ from those in Flagstaff due to differing risk profiles and repair costs.

Property Insurance Type

Landlord insurance Arizona offers various coverage levels:

Property Insurance Type	Approximate Cost Level in Arizona
Basic Form	$
Basic Form with Extended Coverage	$$
Broad Form	$$
Special Form	$$$$

Though Basic Form is the cheapest, many Arizona landlords prefer Special Form for its all-risk protection, especially given risks like wildfires and monsoon storms.

Dwelling Coverage Amount

The costliest part of landlord insurance Arizona is the dwelling coverage limit you select. Arizona landlords often insure their rentals from less than replacement cost to full replacement cost.

We strongly recommend insuring for the full replacement cost value (RCV) based on an insurer’s reconstruction cost estimate. RCV may be higher in Arizona due to inflation in construction materials and labor costs, especially in fast-growing metro areas.

Dwelling Coverage Type	Cost Approximation
Actual Cash Value	$
Functional Replacement Cost Value	$$
Replacement Cost Value	$$$

Deductible

In Arizona, opting for a higher deductible reduces your annual premium. Many landlords select a $5,000 deductible to balance premium savings with manageable out-of-pocket costs in case of a claim.

Deductible	Premium Cost Level in Arizona
$1,000	$$$$
$2,500	$$$$
$5,000	$$$
$7,500	$$
$10,000	$

Claim Frequency and Severity

Insurance carriers underwriting landlord insurance Arizona carefully evaluate past claim history to assess future risk. Both your personal claims history across all properties you own and the claims specific to each Arizona rental property are critical.

Insurers use reports like CLUE (Comprehensive Loss Underwriting Exchange) to review claim patterns linked to your Arizona property’s address. Frequent or severe claims—such as water damage from faulty plumbing common in older Phoenix rentals, or fire claims from the Arizona wildfire season—can increase premiums or limit coverage options.

💡 Pro tip: Choose a higher deductible and file claims only when necessary. Getting insurance quotes early during your Arizona property’s purchase due diligence helps you understand historical claims impact and projected insurance costs.

Crime Score

Arizona rental properties located in areas with higher crime rates—like certain neighborhoods in Phoenix, Tucson, or Mesa—face increased landlord insurance premiums or possible denials of coverage.

Crime scores, derived from local law enforcement data, measure risks of theft, vandalism, and liability claims at a neighborhood level. High scores in Arizona often translate to higher insurance costs for landlords, especially in urban settings.

Though crime scores provide insurers an overview, they don’t always factor in property-specific security features such as alarm systems or gated communities, which can help reduce premiums.

💡 Pro tip: Research crime data for your Arizona rental location before purchase. Installing security devices and obtaining quotes from multiple carriers can help manage insurance expenses.

Property Condition

The condition of your Arizona rental home or apartment significantly affects your landlord insurance premiums. Well-maintained properties in Phoenix’s newer suburbs or Scottsdale’s communities with updated electrical, plumbing, and roofing systems often enjoy lower premiums.

Conversely, older properties with deferred maintenance or hazards like asbestos or outdated wiring—more common in parts of Tucson or historic neighborhoods—face higher premiums or stricter underwriting.

Insurance companies may require inspections or repairs before issuing policies for vacant or deteriorated Arizona rentals.

💡 Pro tip: Regular upkeep and system upgrades in your Arizona property not only protect your investment but also reduce insurance costs. Keep thorough maintenance records and communicate improvements to your insurance provider.

How to protect your Arizona rental property

While landlord insurance Arizona is key to protecting your investment, additional measures can reduce risks and improve your insurance profile.

Tenant Screening

In Arizona’s competitive rental market, thorough tenant screening is essential. Conduct credit and background checks on all applicants, and set clear minimum standards. In markets like Phoenix and Tucson, consistent enforcement of tenant criteria reduces risks of property damage or eviction costs.

Regular Maintenance

Arizona’s climate poses unique maintenance challenges—protect against monsoon-related water intrusion, roof leaks during dust storms, and winter freezes in northern parts of the state. Quarterly property inspections help catch issues early and document maintenance for insurance discounts.

Tenant Education

Educate tenants on preventive care, like promptly reporting leaks or electrical issues common in desert climates, replacing air filters, and how to manage irrigation or water usage to avoid property damage.

DP-3 Insurance

DP-3 insurance, commonly recommended in Arizona, provides special form coverage that reimburses on a replacement cost basis. It is widely considered the best insurance option for Arizona rental homes and small multifamily units.

What is coinsurance?

Coinsurance clauses in Arizona landlord insurance policies penalize under-insuring your property. Most insurers require coverage equal to at least 80% of the replacement cost.

Coinsurance formula:

If your insurance amount is below the required level, your claim payout is reduced proportionally.

Example: For an Arizona rental valued at $300,000 replacement cost, insured for only $150,000 with a $5,000 deductible, and sustaining $50,000 in damage:
($150,000 ÷ $300,000) x $50,000 = $25,000 - $5,000 = $20,000 payout
You would be responsible for $30,000 of repair costs. This highlights why full replacement cost insurance is critical in Arizona’s dynamic market.

Landlord insurance markets

No matter where your rental property is located across Arizona—from the bustling streets of Phoenix to the scenic neighborhoods of Sedona or the growing communities in Mesa and Tucson—we provide comprehensive landlord insurance coverage tailored to your specific region’s risks.

We understand the unique challenges Arizona landlords face, whether it’s wildfire risk in northern Arizona, monsoon storms in the Valley, or flood concerns near the Salt River. Our access to a broad network of insurance carriers allows us to find you the most competitive landlord insurance Arizona policies that fit your property’s location and characteristics.

💡 Pro tip: Certain Arizona cities with higher wildfire or flood risks may require additional inspections or endorsements. Having these documents ready when you request quotes can speed up the process and help secure the best coverage at the best price.

Best Landlord Insurance

When searching for landlord insurance Arizona, you have many options. The best choice depends on the risks you’re comfortable managing, your budget, and how thoroughly you shop around for competitive rates. We recommend a robust landlord insurance Arizona policy that bundles property insurance, general liability, business interruption coverage, and flood insurance when needed.

Working with an agency specializing in landlord insurance Arizona and offering access to multiple carriers ensures you get superior coverage at the best price. Start your landlord insurance Arizona quote today with OfferMarket Insurance!

Landlord Insurance Guidelines

Below are common landlord insurance guidelines tailored for DSCR loans on Arizona rental properties. These coverage recommendations align with best practices for risk management in the state.

Coverage Type	Requirement for Arizona Rentals
Property Insurance	Mandatory; AM Best rating A- VIII or higher
Term	1 Year
Coverage Limits	Greater of 80% replacement cost or loan amount; if replacement cost is lower, use replacement cost
Deductible	$5,000
Accepted Policy Types	Dwelling Fire (Special Form) or Commercial Property (Basic or Special Form)
Cancellation Notice	30 days
Exclusions	No windstorm/hail or named storm exclusions
Lender Designation	Mortgagee

General Liability Coverage

Coverage Detail	Requirement
General Liability Insurance	Mandatory
AM Best Rating	A- VIII or higher
Term	1 Year
Limits	Minimum $100,000 per occurrence; $500,000 preferred; $1,000,000 aggregate
Deductible	$1,000
Coverage Basis	Occurrence (not claims-made)
Cancellation Notice	30 days
Lender Designation	Additional Insured (sometimes)

Business Interruption Insurance

Coverage Detail	Requirement
Business Interruption Insurance	Mandatory
AM Best Rating	A- VIII or higher
Term	1 Year
Limits	One year of effective gross rental revenue
Coverage Details	Actual Loss Sustained basis acceptable
Cancellation Notice	30 days
Lender Designation	Mortgagee

Flood Insurance

Coverage Detail	Requirement
Flood Insurance	Mandatory if rental is in flood zone
AM Best Rating	A- VIII or higher
Term	1 Year
Limits	Greater of $250,000 or loan balance
Cancellation Notice	30 days
Lender Designation	Mortgagee

Additional Details

Mortgagee Clause:
OfferMarket Capital LLC ISAOA/ATIMA
627 S Hanover St
Baltimore, MD 21230

Condos:

• Blanket policy allowed if it includes individual units

• HOA maintains all-risk coverage on common areas and property

PUDs:

• Project blanket policies may be used if units are covered

• HOA maintains all-risk coverage on common areas and equipment

Instructions:

• Use ACORD forms to ensure compliance

• Submit insurance certifications, invoices, or paid receipts at least 24 hours before closing

• Provide final policy documents within 60 days after closing

• Notify insurer if property becomes vacant and secure a vacancy permit for the vacancy period

Frequently Asked Questions

How does OfferMarket Insurance work?

OfferMarket Insurance is a rate-shopping platform specialized in landlord insurance Arizona. We compare dozens of policies to find the best coverage that fits your preferences and lender requirements. Our team of Arizona landlord insurance experts quality-control your quote requests to ensure you get comprehensive protection at the best price.

Do I need a Builders Risk Policy?

Builders risk insurance is not part of landlord insurance Arizona. You only need it if you’re renovating, rehabbing, or building a new rental property.

Can I use Functional Replacement Cost instead of Replacement Cost Value?

It depends on your lender’s guidelines. Many Arizona lenders allow functional replacement cost coverage, but some require replacement cost value depending on the property’s effective age from the appraisal.

Why does the lender need to be an Additional Insured?

In some cases, Arizona DSCR lenders require being named as Additional Insured to extend liability coverage in addition to their mortgagee rights. This protects the lender against liability claims on the rental property.

Can I use my preferred insurance agent for my Fix and Flip or DSCR loan?

Yes, as long as your agent can provide competitive landlord insurance Arizona policies that meet lender requirements. However, agents not specializing in commercial landlord insurance often cause delays.

Can I pay for insurance on the HUD-1/ALTA settlement statement at closing?

Yes. DSCR loans require full payment of landlord insurance premiums at closing, either on the HUD-1/ALTA statement or directly through your agent before closing. A paid receipt is required for verification.

Can I escrow my insurance premium?

Yes. Many institutional lenders require escrowing landlord insurance premiums as part of your monthly mortgage payment in Arizona.

Can I receive a refund if I cancel my landlord insurance policy?

Yes. Arizona insurers must refund unearned premiums on a prorated basis. Ensure your new coverage is active before canceling the old policy to avoid gaps.

What is an AM Best Rating?

AM Best rates insurance companies based on financial strength and stability. For Arizona landlord insurance, we recommend carriers rated A- VIII or better.

What is builders risk insurance?

Builders risk insurance protects your rental property and materials during construction or renovation projects in Arizona. It covers risks like fire, theft, vandalism, wind, and falling debris during the build phase.

Protect and grow your portfolio with OfferMarket

OfferMarket is a real estate investing platform focused on serving rental property investors, specifically 1-4 unit residential properties. Our mission is to help you build wealth through real estate.

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