Opinion | Quinton: Why are Colorado’s insurance costs so high?
Your April 23rd coverage of Gov. Polis’s $800 premium reduction goal is welcome, but it risks misleading readers about why Colorado’s insurance costs are so high in the first place.
Premiums haven’t risen because of corporate greed, as many politicians either assert or imply. Homeowners’ insurers lost money on underwriting in most years between 2020 and 2023, meaning they paid out more in claims and expenses than they collected in premiums. The rate increases Coloradans have absorbed represent insurers finally catching up with reality, not getting ahead of it.
That reality has a name: climate change. Colorado is a dual-catastrophe state. Hail, whose frequency and severity are increasing with a warming climate, accounts for between a quarter and a half of homeowner premiums depending on the county, according to the state’s Division of Insurance data. Wildfire risk, meanwhile, is making coverage unavailable entirely in communities like Nederland and Evergreen. Add post-COVID construction inflation, and the math behind Colorado ranking sixth nationally isn’t mysterious: It’s straightforward and standard risk pricing. When a home that cost $600,000 to rebuild in 2019 now costs over $800,000, premiums must reflect that even if the underlying hazard hadn’t changed at all.
This is why framing the problem purely as a cost-of-living issue, however politically understandable, is itself short-sighted. Mitigation programs and FAIR Plan backstops are helpful. But no legislative roadmap lowers premiums sustainably without addressing the underlying hazard trajectory — a trajectory that is being driven by greenhouse gas emissions, land use and energy policy choices that operate on a different timescale than an election cycle.
Bottom line: The insurance market is, in effect, performing climate risk pricing in real time in ways that policy debates all too often ignore. It’s the same underlying physical risk priced from two different perspectives — and the insurance market’s signal is unambiguous.
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Adam Quinton
Edwards
Chair, Holy Cross Energy
Vice chair and treasurer, Walking Mountains Science Center
