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COLORADO, USA — It’s getting more expensive to buy, and harder to find, home insurance in Colorado.
A new report shared by the Colorado Division of Insurance this month shares data affirming many of the anecdotal stories shared by homeowners in recent years.
“We’ve been hearing a lot of anecdotes, complaints, different questions regarding availability of homeowner insurances, in terms of — can people find it, can they find what they want, what they had before, as well as concerns about rising premiums,” said Vincent Plymell, assistant commissioner for communications and outreach in the Colorado Division of Insurance.
Plymell said the report came about within the context of recent wildfires. A law passed in 2022 required the Division of Insurance to study the stability, availability and affordability of homeowner’s insurance in Colorado.
Between January 2019 and October 2022, the study found the average homeowner saw their premium increase by 51.7% in Colorado. While fire isn’t the only natural disaster risk in the state (which also experiences destructive hail and flooding), Plymell pointed to the recent large, very destructive fires and their impact.
“I think [the] Marshall [Fire], East Troublesome [fire] begin inflection points because some years we’re lucky where the fire is mainly are on national forest land where there aren’t many people, aren’t many homes, aren’t many structures,” he said. “But when they do hit those structures, they are costly, as we’ve seen with Marshall [fire].”
The study found the insurance industry has been struggling with profitability in recent years, despite significant increases in premiums.
“Even with the increasing premiums – companies continue to lose money,” Plymell said. “Which leads to the other interesting point in the report which is, consolidation at the top with the big companies.”
This report found most people are buying from the top five large, national companies. While 76% of other carriers are starting to shrink their portfolios in Colorado – what they offer and where.
“It might mean that we’re not renewing people, or they are renewing but with less coverage at likely higher premiums or they’re putting other sorts of restrictions in place,” Plymell explained. “Basically, they’re reassessing their risk tolerance for covering things.”
Less insurance availability is a concerning trend for the Division of Insurance.
“Obviously, that’s a big concern for the investment people make in their homes and being able to protect that investment… and if people can’t get coverage for their homes, that means it’s going to be difficult to buy and sell their homes, impact communities tax base,” Plymell said.
“And if it happens in just one area of Colorado, or a handful of areas, it’s not going to stay there. It’s going to leak out and become a problem across the state.”
What happens if someone can’t get insurance coverage at all? There is a Democrat-backed bill working through the state legislature this year that would create a public option – like an insurance of last resort.
Other states with natural disaster risks have these systems already for areas threatened by hurricanes and wildfires.
The Division of Insurance helped draft that legislation.
And said the state wants to hear from anyone who is unable to get coverage right now. You can contact the Colorado Division of Insurance Consumer Services Team at 303-894-7490, or DORA_Insurance@state.co.us and doi.colorado.gov.
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