Colorado's insurance crisis
Wildfire risk is on the rise across Colorado, and homeowners are feeling the strain—not only from the physical dangers of fires but also from the growing challenges in securing affordable and comprehensive insurance coverage. Experts warn that the state is teetering on the edge of an insurance crisis similar to what California is currently facing.
Why Colorado Is at Risk
Carole Walker, Executive Director of the Rocky Mountain Insurance Information Association (RMIIA), explains that Colorado’s status as a high-catastrophe state, coupled with unprecedented natural disasters, has created a challenging environment for insurers. “We’re all seeing that play out in rising premiums and also a more limited marketplace for access to insurance,” Walker stated (source).
Over the last decade, insurance companies have experienced consistent financial losses in the state. As a result, homeowners in areas deemed high-risk are being dropped from their policies or facing skyrocketing premiums. For example:
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In Coal Creek Canyon, residents were abruptly dropped by their insurers in late 2024.
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In Castle Rock, HOA fees in the Latigo community doubled due to a 600% increase in insurance premiums.
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Homeowners in Arvada reported difficulty finding coverage, with one resident receiving only a single quote after contacting 20 insurance companies.
What Makes Colorado Vulnerable?
Colorado shares many of the same risks as California, including wildfire-prone areas and rapidly increasing reconstruction costs. However, Walker points out that the state hasn’t yet implemented the same “man-made catastrophes”—policy decisions—that have worsened California’s crisis. Still, she warns that Colorado is “a few bad decisions away” from a similar outcome.
What Homeowners Can Do
As the insurance landscape shifts, it’s crucial for Colorado homeowners to take proactive steps:
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Review Your Insurance Policy: Understand what your policy covers, including wildfire and natural disaster risks.
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Take Advantage of Discounts: Speak with your insurance professional about potential savings and discounts you might qualify for.
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Consider Mitigation Programs: Wildfire mitigation efforts, such as creating defensible space around your property, can reduce risk and make your home more attractive to insurers.
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Explore All Insurance Options: While the Colorado FAIR Plan provides last-resort coverage for properties at extreme risk, it’s best to exhaust traditional options first.
The Role of Legislative Action
Walker emphasized the importance of collaboration between homeowners, insurers, and legislators to stabilize Colorado’s insurance market. Programs that scale wildfire mitigation efforts could make a significant difference in reducing risk and costs. “We know that wildfire is one of those risks that we can bend down through mitigation,” she said. “Doing it at a scale that makes a difference to those insurance companies is key.”
How Chad T. Wilson Law Firm Can Help
At the Chad T. Wilson Law Firm, we understand the challenges homeowners face in securing fair and adequate insurance coverage. Our team specializes in holding insurance companies accountable, ensuring that policyholders receive the compensation they deserve when disaster strikes.
If your insurance claim has been denied or underpaid, don’t navigate the complexities alone. Contact us today for a free consultation, and let us help you protect your home and financial future.
