Living near Colorado’s beautiful mountains has its perks, but these days, it’s not all scenic views and fresh air. The threat of wildfires is causing concerns, even in places like Douglas County. Here, the outdoors are treasured, but there’s a new worry on the horizon–insurance premiums.
In Castle Rock’s Latigo Community, residents are grappling with an unexpected financial hit. The monthly fees to their Homeowners Association (HOA) have surged dramatically, jumping from $300 to over $800. For many, this is a significant increase, akin to a mortgage doubling.
The situation isn’t unique to Latigo; it’s a problem popping up in various locations, not limited to Colorado.
An insurance broker working with Latigo’s HOA sheds light on the matter. He explains that insurance companies are adopting a more cautious approach due to recent substantial losses. The occurrence of costly wildfires, like the Marshall fire, in unexpected places since 2017 has made insurance companies more selective, particularly if your property is in proximity to a wildfire zone.
In Latigo’s case, their insurance provider decided to exit the townhome market nationwide. The alternative insurance the broker found, given the location, comes at an astonishing 600% increase. Discovering your favorite product now costs six times more? That’s a significant financial burden.
When you have a preferred carrier pull out of the market, you go from really competitive pricing to ultra-high pricing, especially during a time when wildfire zones are being redrawn and markets become extra cautious.
The impact of climate change is evident in the situation. It’s a significant problem, all attributed to the changing climate. Wildfires used to have a season, but now they’re a year-round threat. This reality became apparent with the Marshall Fire.
The Colorado Division of Insurance is grappling with the issue. While they lack the authority to regulate premium rates, they’re engaging in discussions to explore alternative ways to assist people in affording insurance. The need for a plan to address this issue is apparent.
There’s mention of a new initiative called the “FAIR Plan,” aiming to provide backup insurance for those struggling to find affordable coverage. However, it won’t come into effect until 2025, leaving those affected with a significant gap in assistance.
For those seeking clarification on insurance matters, the State’s Division of Insurance has a team ready for contact. They can be reached at 303-894-7490 or via email at DORA_Insurance@state.co.us. Additional information is available at doi.colorado.gov under the “file a complaint” section. Assistance is available for those in need.
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