Arizona has roughly ~980,000 renter-occupied units. Average DP-3 landlord premium runs $1,380/yr — about 25–30% above a comparable homeowners policy due to higher liability and vacancy risk. Market profile: Booming single-family rental market in Phoenix metro; Scottsdale and Sedona have high-value STR concentrations. Short-term rental climate: STR-friendly at state level — Arizona preempts local STR bans but municipalities may regulate licensing and taxes.
Avg DP-3 Premium
$1,380/yr
Annual landlord/rental cost
Rental Units
~980,000 renter-occupied units
Renter-occupied housing
STR Climate
STR-friendly at state level — Arizona preempts local STR bans but municipalities may regulate licensing and taxes
STR-friendly at state level — Arizona preempts local STR bans but municipalities may regulate licensing and taxes
| Topic | Detail | Notes |
|---|---|---|
| Market profile | Booming single-family rental market in Phoenix metro; Scottsdale and Sedona have high-value STR concentrations | Drives coverage form selection |
| Top landlord carriers | State Farm, Allstate, Farmers, Liberty Mutual, USAA | Specialized DP-3 underwriting |
| Short-term rental environment | STR-friendly at state level — Arizona preempts local STR bans but municipalities may regulate licensing and taxes | Airbnb-specific coverage needed |
| Notable state law | Arizona's SB 1350 (2016) prohibits cities from banning STRs outright; landlords must collect TPT (transaction privilege tax) | Affects landlord obligations & coverage |
DP-3 (Dwelling Fire) is the standard landlord policy form, covering the structure on an open-perils basis. Landlords also need liability coverage (often $300K–$1M) and Loss of Rents (typically 12 months). Standard homeowners policies do NOT cover rental properties.
Arizona has emerged as one of the fastest-growing rental markets in the country, driven by migration into the Phoenix–Mesa–Scottsdale metro, Tucson's university-adjacent demand, and Flagstaff's mountain resort appeal. Single-family rentals dominate the market, particularly in suburban Maricopa County master-planned communities. The state has a strong landlord-friendly legal environment — evictions can be processed in as few as five days for non-payment under the Arizona Residential Landlord and Tenant Act, and there is no statewide rent control. Wildfire risk in northern and central Arizona, combined with monsoon storm flooding in the Valley, are the primary natural hazard drivers for landlord insurance premiums.
Arizona landlords should prioritize DP-3 open-perils coverage with explicit wildfire and flood endorsements, especially for properties in Flagstaff, Prescott, or foothill locations near the Tonto National Forest. Phoenix-area landlords face monsoon-driven flash flood risk that is often excluded from base DP-3 policies — a separate NFIP or private flood policy may be warranted in low-lying areas. Loss-of-rents coverage is highly recommended given how quickly extreme heat can render a property uninhabitable during HVAC failure. Arizona's STR preemption law makes it one of the most permissive states for Airbnb activity, but landlords must still secure a commercial-use endorsement or standalone STR policy — standard DP-3 language does not cover transient occupancy regardless of state law.
A DP-3 dwelling fire policy is the standard landlord form. Unlike an HO-3, it covers the building structure and landlord-owned contents (appliances, lawn equipment) — not the tenant's personal belongings. Tenants must carry their own renters insurance. DP-3 also includes loss of rents coverage (typically 12 months) if a covered loss makes the unit uninhabitable.
Standard DP-3 policies often exclude or limit short-term rental (Airbnb/VRBO) use. Most landlord carriers either require an endorsement, a separate STR policy, or a commercial dwelling policy. Airbnb's "AirCover" host protection is NOT a substitute for your own policy — it has many exclusions and lower limits.
Arizona's SB 1350 (2016) prohibits cities from banning STRs outright; landlords must collect TPT (transaction privilege tax)
💡 Arizona Pro Tip
Arizona landlords generally pay $1,100–$1,700 per year for a DP-3 policy on a Phoenix-area single-family rental. Properties in wildfire-prone northern Arizona (Flagstaff, Prescott) can run $1,800–$2,800 as carriers increasingly surcharge or restrict wildfire coverage. Scottsdale luxury rentals with high replacement values can push premiums above $2,000.
Not without an endorsement or separate policy. Arizona's SB 1350 prevents cities from banning STRs, but your insurance policy's transient-occupancy exclusion operates independently of state law. You'll need a commercial landlord endorsement or a dedicated STR policy through a carrier like Proper Insurance or Steadily. Scottsdale and Sedona are among the highest-revenue STR markets in the country — ensuring proper coverage is essential.
Arizona does not require landlords to carry insurance by law. Mortgage lenders will impose their own insurance requirements. Landlords renting in wildfire-prone areas should be aware that some standard carriers have stopped writing new policies in high-risk ZIP codes, potentially requiring a surplus lines solution.
Rental unit counts from US Census American Community Survey; premium averages from 2026 carrier rate filings for Arizona. Verify your specific property's coverage with a licensed agent.
Sarah Mitchell
Editorial Lead, Property & Casualty
This article was researched and written by the Cover Forge USA editorial team against federal sources (NAIC, CMS, FEMA, DOL, SSA, state DOIs) and standard policy forms. Bylines organize content by topic — they do not assert individual licensure. See our editorial-policy for details.
Reviewed May 2026
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This site provides general educational information only and is not a substitute for professional insurance advice. All rates, data, and coverage details are estimates and may not reflect your actual premiums. Insurance availability and pricing vary by state, insurer, and individual risk factors. Always consult a licensed insurance professional in your state before making coverage decisions.