Colorado weather can be quite catastrophic, which is, in large part, why insurance rates have increased so drastically over the past few years. Why would the weather have such a large impact on insurance premiums?
According to a recent study conducted by the Colorado Division of Insurance, the affordability, availability, and stability of home insurance has increased across the state. This study became a requirement after this law passed last year. This study showed that on average, in the state of Colorado, homeowners' premiums were rising by over 50%
We can certainly accredit much of this increase to the Marshall (and other) Fires that have been rampant across our state. Though that’s not the only natural disaster we are dealing with here in Colorado. We also deal with significant hail, as well as flood risks which can cause significant damage and even complete destruction. In fact, Colorado has the third highest wildfire risk and the second highest number of hail claims in the country.
Devastating wildfires and destructive hailstorms have left insurance companies grappling with high payouts, which inevitably get passed down to policyholders in the form of higher premiums. Even with the rising premiums, insurance companies have seen a significant decrease in profits. While many are renewing their policies, they are decreasing their coverage, which can leave people in a very precarious situation. Since buying a home is such a large investment, having coverage to protect your assets is absolutely crucial. The number of Coloradans insurers will cover has decreased by 76% in the last year alone.
Across the state, 65% of insured are covered by only 5 carriers now. Their losses here are greater than in just 4 other states, which is part of why premiums are rising so quickly and significantly. Some of the most common damage inflicted is:
Siding on homes
Broken windows on home and vehicle
Cosmetic damage to vehicle
Damage to roofing on home
Punctures in rubber gaskets that protect pipe vents
Significant damage to patio furniture, and even hot tub covers
Destruction of lawns and gardens
In extreme cases, it can even take the lives of animals or people
There are many hailstorm reporting services that can help track your local weather. You can also look at archives of weather conditions over the past decade to get an idea of what to expect.
When it comes to insurance increases, another crucial reason is to keep you covered with the rising cost of living. Inflation is inevitable and the cost to rebuild, including labor, has greatly increased over the last few years. This means it costs more to replace or repair any damage to a vehicle or home. With this being the case, increasing premiums on insurance policies ensures protection of your assets in the event of a loss.
As Colorado faces the impact of climate change and population growth, insurance hikes have become a reality for residents. Although these increases may pose challenges for families and individuals, taking proactive steps to understand the reasons behind the hikes and exploring cost-saving strategies can help Coloradans safeguard their assets and financial well-being. We are here to help you navigate through the changing insurance landscape and find the most suitable coverage for your needs. While the rising cost can feel frustrating, we truly are here to protect you and give you peace of mind.
If you have any questions, would like to speak further. or get a quote, please reach out to the office at 720.335.6872.