A new study just spilled the beans on homeowners’ insurance in Colorado, and it’s not great news. Turns out, it’s getting harder to find and afford insurance here.
This study, done by the Colorado Division of Insurance, did some digging. And get this, 76% of insurance carriers decided to cover fewer Coloradans last year. That’s a big chunk! And over the last three years, the cost of insurance in our state shot up by a whopping 52%.
Here’s the deal. Some insurance companies are ditching policies in spots where the risk is high, like wildfire zones. Makes sense, right? But, surprise, surprise, the issue isn’t just hanging out in these high-risk areas. Policies are getting canceled, and everyone’s paying more from the Western Slope to the Eastern Plains. Colorado is the third-highest in the country for wildfire risk and the second-highest for hail claims.
The Colorado Division of Insurance says policyholders are all shelling out almost 23% more for insurance just since last year started and over a third of the insurance carriers canceled ten percent of their policies here. That’s a lot of canceled plans.
Catastrophes are popping up, home prices are going through the roof, and inflation is doing its thing. It’s like a mix of bad ingredients creating trouble for us in Colorado. We’re on the edge of something big, and we don’t want insurance companies saying, it’s too risky, we’ve gotta get out of here!
The study found that the little guys, the smaller insurance companies, are already taking a step back in Colorado. Only about five carriers are handling most of the state, and they’re facing losses bigger than almost any other state. It’s a tricky situation and we need to be careful about how we move forward. We don’t want to make things worse.
There’s this idea floating around called the “Fair Plan”: a special state insurance option. But some in the Colorado Division of Insurance are waving a caution flag. We need to look at states like Florida and Louisiana who tried something similar, and it almost went belly-up. This time, we need to get it right.
And this study? Well, it’s just the beginning. There are more questions to answer. Like, where exactly are people struggling to get insurance? What kind of homes and policies are causing the headache? What areas in Colorado are feeling the heat? It’s a puzzle that’s slowly coming together.
So, bottom line, insurance in Colorado is going through some rough times. We’re at a crossroads, and we need to figure out the best way forward. Stay tuned for more on this insurance saga!
HOA fees are increasing due to wildfire risk! Read about it here.
How often should you be updating your insurance policies? Find out here!