Looking into the future, it may be more difficult to find home insurance in Colorado, as providers are shrinking their exposures in the state amid a growth in the number of wildfires across the state. That’s according to a report from the Colorado Department of Regulatory Agencies (DORA).
The Colorado market hasn’t been profitable for home insurance providers, according to the report, which states “the Colorado market has been struggling in recent years, reporting the fourth-largest 5-year direct loss and defense and cost-containment expenses ratio of all US jurisdictions.”
Much of that is tied to an increase in the number of wildfires across the state. Western Colorado, in particular, is represented in the report as “high” risk for wildfires.
The home insurance industry has grown nationwide, but since 2020, exposures in Colorado have been shrinking for providers outside the top five carrier groups. The writer of the report says “a market consolidation appears to be taking place in Colorado, with the largest carriers taking a bigger piece of the pie.”
Through October 2022, 76% of carrier groups had shrunk their exposure, writing fewer policies than they had over the same year-to-date period the year prior. Still, some carriers report no efforts to withdraw from high-risk territories while other carriers are reporting non-renewal initiatives that target a small percentage of Colorado homes that face extreme risk of wildfires.
Over the last three years, premiums have been rising for homeowners. Between January 2019 and October 2022, the average homeowner premium is up 51.7% and continues to rise more significantly every year, according to the report. In 2020, the pace of premium increases was 6.75%, and in 2022, the average premium increase is 14.84% Montrose County saw an average premium increase of 10.19% from the beginning of 2022 to October 2022. Delta County saw a 10.57% increase over the same period. Ouray County’s average premium increase was 17.16%. San Miguel County, with an average increase of 21.79% only trailed only Pitkin County on the statewide county-level ranking list.
