Division of Insurance: Colorado Takes Further Action to Lower Homeowners Insurance Rates

Division of Insurance: Colorado Takes Further Action to Lower Homeowners Insurance Rates

DENVER - Today, the Colorado Division of Insurance (DOI), part of the Department of Regulatory Agencies (DORA), applauded Governor Jared Polis's signing of SB26-155 into law. This legislation creates the Strengthen Colorado Homes Enterprise in the DOI to implement a grant program to help homeowners fortify their roofs against hailstorms and requires the Enterprise to study options for reducing insurance costs associated with wildfire risks.

"Over the last four years, I have had homeowners insurance affordability and availability concerns at the top of my mind. I'm exceptionally proud of the strides we've made in these areas. We started by creating the FAIR Plan to ensure all Coloradans have access to homeowners insurance. Then we fought to pass HB25-1182, which will help consumers understand how insurance companies are evaluating wildfire risk, require the companies to incorporate mitigation work into their risk assessments, and require companies to give Coloradans information about what discounts are available for mitigation. SB26-155 builds on what we've done so far and will generate real savings for Coloradans through a hail mitigation grant program. Hail is the number one cost driver of homeowners insurance premiums in our state, and this legislation will ensure that more Coloradans can afford to upgrade their roofs, thereby reducing claims and risk across the state. I'm thrilled Governor Polis signed this legislation into law, and I'd like to thank the bill sponsors for all of their hard work getting it over the finish line," said Colorado Insurance Commissioner Michael Conway.

SB26-155 is the latest effort supported by the Division of Insurance to address homeowners insurance costs and availability. Colorado homeowners insurance rates are impacted by both hail and wildfire risks. The DOI recently found that hail damage is the number one cost driver of homeowners insurance rates in the state. It accounts for an average of 26 percent to 54 percent of an annual homeowners insurance premium, and it affects premiums even in locations across the state that don't experience much hail. One of the most effective ways for consumers to prevent hail damage and the costly claims that go with it is to upgrade their roofs with more hail-resistant materials.

The Enterprise created by SB26-155 will provide grants to homeowners to retrofit residential properties with resilient roof systems. Similar grant programs have been successful in states across the country.

The Enterprise will be governed by a seven member board that includes the Colorado Insurance Commissioner, experts in home hardening, and members to represent interests of insurers, consumers, and counties. In the coming weeks, DOI will be putting out a call for qualified individuals to apply to the board.

In addition to SB26-155, DOI championed HB25-1182, which was signed into law last year and becomes effective later this year. It requires insurers to consider property specific and community level mitigation efforts in their wildfire risk models, ensuring that risk scores reflect risk reduction efforts, and requires insurers to notify policyholders and applicants of their risk score and provide them with the ability to appeal. It also requires insurers to publicize available mitigation discounts. This required transparency will allow Colorado homeowners to make informed decisions about their homeowners insurance policies and the kinds of mitigation that would be most effective for people to keep their coverage as well as reduce premium costs.

These bills follow the Colorado FAIR Plan (Fair Access to Insurance Requirements), which was signed into law in 2023. The FAIR Plan offers limited property coverage to homeowners and businesses when traditional insurance is unavailable, improving access to homeowners insurance options to all Coloradans.

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