Expert says Colorado is on the brink of an insurance crisis similar to California
Anytime, anywhere, wildfire risk is growing in Colorado. Across the state, homeowners are feeling the impact, especially when it comes to insurance.
"Being a high-catastrophe state at a time when we're seeing unprecedented, historic catastrophes is something the insurance industry is unfortunately responding to," explained Carole Walker, executive director of Rocky Mountain Insurance Information Association. "We're all seeing that play out in rising premiums and also a more limited marketplace for access to insurance."
It's an issue CBS News Colorado has covered for years. In December 2024, homeowners in Coal Creek Canyon told CBS Colorado they were suddenly dropped by their insurer.
"It doesn't matter the condition of our home, the age of our home. It's where we live," Erik Johnson said.
It's been an issue in Colorado's mountain communities, and it's also an issue homeowners have faced in Arvada.
"We went through 20 insurance companies and in actuality got back one quote," Bob Hunter previously told CBS Colorado.
And, in 2023, homeowners in the Latigo community in Castle Rock saw their HOA fees more than double due to insurance premiums climbing by a shocking 600%.
"That's my mortgage payment," Sibyl Swope shared with CBS Colorado. "My mortgage just doubled."
Over the last decade, insurance companies have lost money year after year in Colorado. Walker said the state is on the brink of an insurance crisis.
"We really are at a tipping point," Walker said. "So California really has itself in an insurance crisis. It's not just because of their escalating risks though. It's also they have made man-made catastrophes in the decisions they've made to try to really push insurance companies out of the marketplace ... We haven't made some of those bad decisions yet, but I sit here on the first day of the legislative session -- we're a few bad decisions away from being where California is."
While the wildfires currently burning in California are unlikely to directly impact insurance premiums in Colorado, the growing risk of such disasters will. Walker advises every homeowner to review their insurance policies.
"Now is the time to be a very informed consumer," Walker said. "Shop your options, but be talking to your insurance professional [and ask], 'Am I taking advantage of every discount? Am I saving?'"
Walker added the Rocky Mountain Insurance Information Association is "at the table talking to legislators" about how to keep a stable, competitive insurance marketplace in Colorado. She said, while there is no silver bullet to solving this problem, there are steps everyone can take to help. Still, RMIIA has an extensive homeowners Q&A page on its website.
"We know that wildfire is one of those risks that we can bend down through mitigation," Walker said. "That needs to be a serious conversation now ... There are pockets of mitigation programs, but we need to be following the signs, doing it at a scale that makes a difference to those insurance companies who are now facing this enormous risk, enormous cost that could wipe out their business. We need to do everything we can to make our properties safer."
The Colorado FAIR Plan provides property insurance for Colorado properties at extreme risk of natural disaster. It should be considered a last resort after exploring all traditional insurance options.
"Really, we're all in this together," Walker said.
