DENVER ~ In an effort to address the rising cost of homeowners insurance in Colorado, Governor Polis and the Colorado Division of Insurance (DOI) have released new data from homeowner insurance carriers. This data, collected from 20 carriers representing 80% of the market, sheds light on the main cost drivers for homeowners insurance in the state.

Hail has been identified as the largest cost driver for homeowners insurance spikes in many counties across Colorado. The DOI requested data from these carriers to better understand the breakdown of insurance rates and to identify potential mitigation discounts for hail and wildfire risks.

Governor Polis stated that saving homeowners money on insurance is crucial in lowering the overall cost of housing. He emphasized that innovative actions must be taken to lower premiums, increase home resilience, and ensure safety for residents.

The data revealed that hail accounts for an average of 26-54% of total homeowner insurance premiums, depending on the county. Even counties with less frequent hail activity, such as Summit County, are still paying a significant percentage of their premiums towards hail damage. In Summit County, where hail is not a common occurrence due to its mountainous terrain and lack of moisture, it still accounts for an average of 35.6% of premiums. On the other hand, wildfire only accounts for 7.9% of premiums in this county.

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Along the Front Range and into the Eastern Plains, hail has a much larger impact on insurance rates. In these areas, it accounts for approximately 50% of premiums while wildfire has a smaller impact. The data also showed that insurance carriers are targeting high-risk areas when pricing for wildfire risk. Low-risk counties like Denver only see an average of 1% of their premiums going towards wildfire risk.

Colorado Insurance Commissioner Michael Conway emphasized that hail is clearly the biggest cost driver for homeowners insurance across the state. He also noted that even residents living in mountain communities are paying for hail damage through their premiums. To address this issue, the DOI is working with the Colorado General Assembly to create a grant program for fortifying roofs and a reinsurance program for wildfires.

The two-pager of the findings, which includes a breakdown by the 11 counties surveyed, can be found here. It is evident that fortifying roofs against hail and finding innovative solutions for high-risk wildfire areas are crucial in bringing down insurance rates for Coloradans. With this data, Governor Polis and the DOI hope to take necessary actions to lower premiums and increase home resilience and safety.

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