New data released by Governor Polis and the Colorado Division of Insurance (DOI), a part of the Department of Regulatory Agencies (DORA), highlights that hail is the main factor behind rising homeowners insurance premiums in many counties across Colorado. The DOI collected information from 20 insurance carriers, which together represent 80% of the state’s market, to better understand what drives insurance rates.
The data analyzed average homeowners insurance premiums in 11 counties, looking at how much of each premium is linked to hail and wildfire risks. It also examined discounts available for mitigation efforts against these risks.
“We know that homeowners insurance simply costs too much, and saving home homeowners money on insurance must be a part of the overall solution to lower the cost of housing. This data clearly outlines the problem, and now we must take innovative actions to lower insurance premiums, save people money, and increase home resilience and safety,” said Governor Polis.
Findings show that hail accounts for between 26% and 54% of total homeowner insurance premiums depending on the county. Even in areas like Summit County—which rarely experiences hail due to its mountain climate—hail still makes up about 35.6% of premiums. In contrast, wildfire risk in Summit County only represents 7.9%. Along Colorado’s Front Range and Eastern Plains, about half of homeowner premiums are attributed to hail damage; wildfire has a smaller impact on these costs.
Wildfire risk contributes less to homeowner premiums statewide, ranging from just under 1% up to nearly 25%, based on location. Insurance companies tend to charge higher wildfire-related rates only in high-risk areas. For example, Denver residents pay an average of just 1% of their premium towards wildfire risk.
“The data is clear: it is hail that is the biggest cost driver of homeowner insurance for families across the state. Even Coloradans who don’t live in hail-prone areas, such as in mountain communities, are paying for hail damage through their premiums. We can’t change the weather in Colorado, but we can and should help consumers in high risk areas fortify their roofs because that will help lower everyone’s premiums. And we have to find innovative solutions to help address affordability in our high wildfire areas of the state. To that end, we’re working with the Colorado General Assembly again this year on legislation to create a grant program for fortifying roofs, as well as a reinsurance program for wildfires,” said Colorado Insurance Commissioner Michael Conway.
A summary report with detailed findings by county has been made available by state officials.
