The Colorado Homeowner Insurance Crisis Explained: Premiums, Non-Renewals, FAIR Plan, and the New Wildfire Score Law

The premium picture, in numbers

The Office of the Governor reported in May 2025 that Colorado homeowner insurance premiums rose roughly 100 percent between 2018 and 2024, compared with a national average of 58 percent over the same period. A separate Metro Denver Economic Development Corp study found a 30 percent statewide increase between 2019 and 2023. A Division of Insurance study mandated by HB24-1108 documented a 115 percent increase in HOA master policy premiums between 2020 and 2024.

Industry estimates of the average annual Colorado homeowner premium in 2025 range from approximately 4,100 dollars in NBER-derived escrow data to roughly 6,630 dollars in the Insurify 2025 projection. The range reflects different methodologies but the direction is consistent. Colorado is among the four or five most expensive homeowner insurance markets in the country.

Hail accounts for an estimated 26 to 54 percent of homeowner premium statewide, and roughly 50 percent along the Front Range. The single May 30, 2024 Denver metro hailstorm produced approximately 1.9 to 2.0 billion dollars in insured damage, the second-costliest hailstorm in Colorado history.

The non-renewal pattern

A 2024 Division of Insurance market study found that 38 percent of Colorado property carriers had contracted their risk appetite in the prior twenty-four months. Brokers report that 30 percent or larger renewal increases became routine in 2024 and 2025, and that some foothill premiums moved from approximately 3,000 dollars per year to 10,000 to 14,000 dollars per year. Several major carriers including State Farm, Allstate, USAA, Travelers, and Liberty Mutual have restricted new business in certain ZIP codes since 2022.

Non-renewals on existing policies often appear with 60 days notice, the minimum required under HB23-1174. The reason given is typically a combination of property age, roof condition, prior claim history, or wildfire risk score. Non-renewal does not require carrier-specific cause beyond underwriting discretion.

HB23-1174, the underinsurance and disclosure bill

House Bill 23-1174, signed in 2023, addressed the systemic underinsurance documented after the Marshall Fire. A peer-reviewed study found that 74 percent of Marshall Fire policyholders were underinsured and 36 percent severely underinsured, with average shortfalls of 99,000 to 240,000 dollars per home. The bill requires changes that apply to all Colorado homeowner policies.

• Annual Division of Insurance report on regional reconstruction costs, used to evaluate replacement cost calculations across carriers.
• Sixty-day notice on non-renewal or cancellation, increased from the prior 30-day standard.
• Mandatory disclosure of how the carrier calculated the replacement cost on the home.
• Required offer of extended replacement cost coverage of at least 50 percent above the dwelling limit.
• Required offer of law and ordinance coverage of at least 20 percent above the dwelling limit.
• Required offer of guaranteed replacement cost where the carrier writes the form.

HB23-1288 and the Colorado FAIR Plan

House Bill 23-1288, signed in 2023, created the Colorado FAIR Plan Association as the state's residual market for homeowners who cannot obtain coverage in the standard market. The FAIR Plan began accepting residential applications on April 10, 2025. Coverage is intentionally limited to function as a last resort.

• Eligibility requires three written declinations from carriers in the standard market.
• Coverage limits are capped at 750,000 dollars on the residential dwelling. Subsequent reporting indicates the commercial cap is 2,000,000 dollars rather than the originally enacted 5,000,000.
• Coverage is on an Actual Cash Value basis, not Replacement Cost. The FAIR Plan does not pay recoverable depreciation.
• Premiums are higher than standard market quotes for equivalent coverage, often by a factor of two to four.
• As of mid-July 2025, only approximately 31 residential properties were covered. The intent is that the FAIR Plan grows slowly and remains a last resort, not a primary market.

HB25-1182, the wildfire risk score and mitigation credit law

House Bill 25-1182, signed in 2025 and effective January 1, 2026, addresses the use of wildfire risk models in pricing and underwriting. Carriers using these models must now disclose the score, incorporate property and community mitigation, and provide an appeal process.

• Insurers using a wildfire risk model must disclose the homeowner's plain-language risk score on request.
• The model must incorporate property-level mitigation including Class A roofing, ember-resistant vents, defensible space, and combustion-zone hardening, or the carrier must provide a documented discount for these items.
• The model must incorporate community-level mitigation such as Firewise USA designation and county wildfire mitigation plans.
• The carrier must provide a written appeal process with a 10-day acknowledgment and a 30-day decision on the appeal.
• Documentation that supports the appeal includes contractor invoices, photos with date stamps, code compliance certificates, and Firewise USA participation records.

SB 12-038, the Roofing Bill of Rights, in context

Senate Bill 12-038, codified at C.R.S. 6-22-101 through 6-22-105, predates the current crisis but governs every Colorado roofing claim. SB 38 has not changed since 2012 but its enforcement has tightened.

• Written, signed contracts are required for any residential roofing work over 1,000 dollars.
• Homeowners have a 72-hour right of rescission. The window restarts if the insurance settlement is denied or revised.
• Contractors are prohibited from paying, waiving, or rebating any portion of the homeowner's insurance deductible. Violation is classified as a class 5 or 6 felony under CRS 18-5-211 deductible-fraud provisions.
• Contractors are prohibited from acting as public adjusters or representing the homeowner in negotiations with the carrier.
• Roofing contracts contingent on insurance approval are permitted but must include defined cancellation rights for the homeowner.

Underinsurance and the practical reset after a major loss

The underinsurance documented after the Marshall Fire is not unique to wildfire. Hail and wind total losses on aged Colorado roofs frequently uncover the same gap. The dwelling limit on the policy is often based on a calculation done at policy inception, not adjusted for inflation, and not adjusted for code-required upgrades that apply at the time of rebuild.

• Replacement cost calculations on Colorado homes typically need to be reviewed every two to three years to track construction inflation.
• Extended replacement cost coverage at 50 percent above the dwelling limit is the practical floor for most Front Range homes built before 2010.
• Law and ordinance coverage at 20 percent above the dwelling limit is the practical floor for any home that may require code upgrades at rebuild, including ventilation, sheathing thickness, ice and water shield coverage, and CWRC compliance in designated zones.
• Personal property limits are commonly insufficient and are usually set at 50 to 75 percent of dwelling coverage. Reviewing personal property at renewal prevents the second underinsurance gap.

What carriers are doing on roofs specifically

Carrier behavior on the roof line has shifted in three documented ways since 2022.

• Roof Payment Schedule endorsements have spread from a small number of carriers to most major Colorado carriers, applying age-based percentage settlements rather than full replacement cost.
• Cosmetic damage exclusions have appeared on metal roofs, gutters, downspouts, and certain siding, denying claims that do not affect water shedding or function.
• Percentage wind and hail deductibles of one to five percent of dwelling coverage have largely replaced flat dollar deductibles on new and renewing policies.
• Class 4 impact-resistant shingles continue to qualify for premium discounts in the 10 to 35 percent range, with a typical Front Range outcome of 25 to 28 percent on the wind and hail portion of the premium. Most carriers require certificate documentation and an installation invoice.

What this means for a Colorado homeowner planning work in 2026

The crisis changes the practical calculus on roof and exterior work. Five items deserve attention before the next renewal or storm.

• Read the declarations page. Confirm RCV, identify any Roof Payment Schedule or cosmetic exclusion, and verify the wind and hail deductible structure.
• Confirm the dwelling limit reflects current Front Range reconstruction costs. Request the carrier's current replacement cost calculation under HB23-1174.
• If your roof is approaching the carrier's age threshold for ACV or RPS, the economics often favor replacing while RCV is still in force.
• If you live in a designated wildfire zone, document mitigation work in writing, photographs, and code certificates. Use the HB25-1182 appeal process if the carrier does not credit the work.
• Verify any roofing contractor's compliance with SB 38 in writing. Refuse any contract that promises to absorb the deductible. Keep the 72-hour rescission window intact until the insurance settlement is final.