Why disaster mitigation can protect your house, but may not lower your insurance bill — yet
As Colorado’s insurer of last resort comes online, new technology and upcoming legislation could make rising insurance premiums finally reflect efforts to lower risk
Data and technology are feeding a plethora of new methods to help homeowners figure out their property’s risk for wildfire, flooding or other extreme weather event. It’s as simple as typing in one’s address to get an instant and detailed report, complete with action items to protect their property from wildfires or one of the Front Range’s notorious hailstorms.
But if insurance companies aren’t taking those models — or homeowner mitigation efforts — into account, what’s the point, wondered Colorado Insurance Commissioner Michael Conway.
“It makes me feel like we’re lying to people,” Conway said at an Oct. 15 town hall for homeowners in Pueblo. “So if we’re telling people that they should do things, then that has to be reflected in these models. So they have to get better.”
Several billion-dollar disasters affecting Colorado properties have led to a spectacular rise in homeowner insurance premiums in the past few years, while insurers cite larger losses because they’re paying out more in claims than they’re taking in from customer premiums. The wildfires still burning in Los Angeles have created unprecedented property losses at a time when several insurance companies had already dropped customers in risky areas.
Colorado has its own solutions on the way with the Fair Access to Insurance Requirements, aka the FAIR Plan, the state’s own home insurance plan. FAIR expects to start accepting applications from homeowners who’ve been rejected by everyone else “this quarter,” a fuzzy start date. Other laws passed in prior years are also in study sessions while Conway said he’s been working with lawmakers on proposals to make sure homeowners’ work to make their houses more resistant to fire and hail aren’t overlooked.

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