Rising Homeowners Insurance Rates in Colorado: Impacts and Legislative Efforts

Insurance rates in Colorado are anticipated to be among the highest in the United States this year, with the state ranking sixth nationwide. According to a report by Insurify, homeowners in Colorado paid an average of $3,996 for insurance by 2025, marking a substantial 33% increase over previous rates. The report projects an additional 4% rise to $4,164 by the end of 2026.

Insurify's findings indicate that insurers in Colorado faced financial difficulties in 2023, as claims payments surpassed premium revenues. The escalating insurance costs are primarily attributed to hail damage, which significantly influences premium rates across various counties. Additionally, wildfire risk is a critical factor, particularly in areas like La Plata County, where it contributes significantly to premium costs.

For illustration, the average home insurance premium in Denver County is $3,040, with $1,547 of that amount linked to hail damage. In El Paso County, hail accounts for an average of 52.5% of the premiums. Matt Brannon, a senior economics analyst with Insurify, noted a sharp increase in Colorado's insurance costs, moving the state from the ninth to the sixth most expensive for homeowners insurance since 2023.

The Colorado Division of Insurance has encouraged hail mitigation strategies, such as reinforcing roofs, to help reduce premiums. Colorado Insurance Commissioner Michael Conway stressed the importance of preventative actions for homeowners, even in less hail-prone areas, to alleviate high insurance expenses.

Legislative Developments and Risk Mitigation

The division is working with lawmakers on Senate Bill 26-049, which aims to extend eligibility for state grants available through the Natural Disaster Mitigation Enterprise. This effort focuses on promoting impact-resistant roofing materials among homeowners and associations. The bill also suggests tax deductions for homeowners creating catastrophe savings accounts.

However, the bill has encountered roadblocks in the Senate Finance Committee since its introduction in January, facing opposition from various state entities. Assistant Minority Leader Senator Lisa Frizell, a sponsor, stated that the bill's provisions are continually being refined. Brannon advises homeowners to diligently explore insurance options to find competitive rates and undertake practical steps to lower their homes' risk, such as tree maintenance and roof upgrades.