Colorado homeowners insurance costs continue to climb. Now, Colorado ranks seventh in the country for above-average homeowners insurance costs, according to data from Barkrate. Extreme weather and Colorado wildfires have lead to increased premium costs. A study that was just released by the National Bureau of Economic Research, found that insurance premiums have increased by 33% nationwide in the last three years. The increases that are occurring nationwide are due to extreme weather events. It is expected that insurance premiums, in Colorado, will increase by as much as $700, in the next 10 years. These increases are happening all across the state of Colorado, including parts of the state that are NOT affected by wildfires.
Insurance changes
Why is this happening? Professionals believe that insurance was underpriced for a long time. This was because the average homeowner would file a claim only every eight years. But now we are seeing a change. Homeowners are filing claims far more often and the payout for insurance companies in much higher. Both due to the increase in catastrophes and the increase in wildfires. Unfortunately insurance premiums have had to adjust for that increased risk and payout.
Dropping coverage
Another thing that is happening in Colorado is insurance companies are dropping certain residence in high risk areas. The insurance companies are unable to turn a profit due to the increase in extreme weather events, so they are refusing to provide insurance. What can the homeowner do?
Do a check up
A bill passed in this year’s legislative session that requires the state’s Division of Insurance to conduct a market study into increasing costs and canceled policies. They are to study potential solutions and make recommendations. The results of that study are required to be released publicly by January 0f 2026. In the meantime, as a homeowner, take a moment to check your insurance policies. Make sure that you are properly insured. Insurance should not be skimped on. Do a check up with your insurance professional annually. Ask questions before the unthinkable happens and it is too late.