Denny Dahl and his wife dreamed for years of having a cabin in the mountains and when they bought one near Idaho Springs in 2020, the home away from home became “a paradise.”
The dream began to feel like a nightmare when their insurance company, which the Denver couple had scrambled to find, announced a stratospheric increase of 740%. Their home insurance would skyrocket from $4,677 to $34,600 for 2025.
“I thought it was a joke. But no, it was real,” said Dahl, who believes the company wanted to get out of insuring homes in the mountains because they’re seen as vulnerable to wildfires.
After consulting insurance brokers, the Dahls found a policy for $3,353 through USAA, which caters to military members, veterans and family members. The company then knocked $1,000 off the original quote because the cabin’s roof was made of fire-resistant materials. The couple cut down 18 trees to reduce the wildfire risk.
“It was just a gift from the gods, honestly,” Dahl said of the policy. “I’m waiting for the other shoe to drop next year, but at least for this year it’s behind us.”
Dahl’s experience might be at the extreme end of the scale, but homeowners throughout Colorado have seen their premiums rise significantly. Some people have been dropped by their insurance companies.
While people’s claims history, inflation, higher labor and construction costs play into increases nationwide, Coloradans face the additional burden of living in a state where the risk is high of catastrophes wreaking billions of dollars in damage.
State lawmakers, officials and industry representatives have collaborated on solutions, including a state-created, industry-financed insurer of last resort for homeowners and businesses that can’t get coverage through the standard companies. A law approved this year promotes more transparency into how insurers assess wildfire risk and requires companies to consider steps that homeowners take to reduce the risk when setting premiums.
Carole Walker, executive director of the trade organization Rocky Mountain Insurance Information Association, believes that stabilizing the insurance market is vital and reducing the biggest risks in Colorado — hail and wildfires — is essential to doing that.
“The challenge is Colorado is ranked second for hail insurance claims. It’s second for the number of properties in high-risk wildfire areas. You add to that the market conditions,” Walker said.
A report projects that Colorado, facing increased hail damage, will be one of the four most expensive states for home insurance by the end of the year. Insurify, an insurance comparison shopping website, said the cost will jump 11% to an average annual cost of $6,630.
On the national level, the annual cost of home insurance will rise 8% by the end of 2025 to an average of $3,520, Insurify said. Severe weather — wildfires, hurricanes, hail — is leading insurers to raise rates.
“We keep looking for insurance solutions when some of it we can control and some we can’t,” Walker said. “What we need to be looking at long term is risk-reduction solutions.”
Colorado has been one of the most expensive states in the country for home insurance for a number of years, said Michael Conway, the Colorado insurance commissioner. “The vast majority of that is hail.”
The state’s costliest hail storm produced 100,000-plus claims in 2017 and $2.3 billion in damage, the Rocky Mountain Insurance Information Association reported. Conway said two 30-minute storms in 2024 in different parts of the state caused a combined $1 billion in damage.
The losses add up quickly with hail because of the number of structures and cars in the path, Walker said. “You can have one 45-minute hail storm that cuts from northern Colorado down through the Front Range to southern Colorado and now you’ve got billions of dollars in damage.”
The 2021 Marshall fire, the costliest in Colorado history, burned for more than a day in parts of Superior and Louisville, killed two people, destroyed more than 1,000 homes and destroyed $2 billion worth of property.
Wildfire threats, insurance troubles
Although hail is the No. 1 driving force behind Colorado’s high home insurance premiums, wildfires, more frequent and intense as climate change contributes to warmer, drier conditions, are increasingly a problem for homeowners. People living in areas deemed at high risk for wildfires are facing pricier policies or the loss of coverage as companies try to limit their exposure.
A report released in August by Cotality, a data analytics firm, ranks Colorado second only to California in the number of homes in moderate or greater risk of fire — 318,783 — and the cost of rebuilding those homes — $146.2 billion. Metro Denver is listed among the 15 most at-risk metropolitan areas, with parts of Jefferson and Boulder counties designated as high or extreme risk.
West Metro Fire Rescue is among the agencies and local governments proactively tackling the growing danger to lives, homes, businesses and landscapes. The fire district, which serves parts of Jefferson and Douglas counties as well as Lakewood, Golden and other cities, has been working for a while with residents on mitigating wildfire risk in neighborhoods.
The efforts picked up when West Metro hired Tom Welle, a wildfire mitigation specialist formerly with the National Fire Protection Association. He ran the Firewise USA program out of the Denver field office. Now, he works with residents on setting up Firewise programs to make homes and neighborhoods more fire-resistant.
Eight neighborhoods in the fire district have been recognized as Firewise sites and two are in the process, said Sean Jewell, West Metro’s division chief of special operations. Jewell said the district is looking at how it can support residents, secure grants to upgrade homes and work with other agencies to keep communities safe.
Jefferson County established a new wildland fire management program after voters decided in 2024 that the county could keep tax revenue beyond the limit imposed by the Taxpayer’s Bill of Rights. A major focus is on mitigation.
“You look at the weather we’re having now, it definitely seems like we tend to see more of the red-flag days in addition to having construction into more of the (wildland-urban interface) area,” said Jewell, who’s been with West Metro for 28 years. “You get a lightning strike on a day when we have a cold front coming in the next day, the winds are 60, 70 mph. Before it may have just gone through vegetation. Now, you’ve got vegetation, houses and businesses.”
Welle works with residents on fortifying their property through Firewise, a voluntary program. A first step is ensuring there are no flammable items, including vegetation, in the first 5 feet around a house and then farther out. Decks, siding, roofs and gutters all get scrutinized. Welle said most house fires are started by embers from a wildfire that ignite flammable material around a home.
Firewise participants get a check list, conduct assessments of their neighborhood and join neighbors in “chipping days,” when they haul branches, limbs and trees they’ve cut down to a wood chipper.
The Colorado State Forest Service helps implement the program. Welle said the sites need to have at least eight homes and no more than 2,800.
The key is collaboration, Welle said. “Your home isn’t safe if your neighbor’s home isn’t safe.”
Insurance coverage in the face of fire threats is often on people’s minds, Welle said. “There have been several instances where folks have gotten letters on nonrenewal.”
A fire just up the hill from his Willow Springs neighborhood galvanized Todd Houghton to get serious about wildfire threats. He talked to experts and researched fire prevention.
“Within about six months, I had become a certified wildfire mitigation specialist, not because I wanted to do it for a living,” said Houghton, who’s a real estate broker.
Houghton wanted to share the information with others and started organizing Firewise initiatives. Five of the sites in the Willow Springs neighborhood near C-470 and Belleview Avenue in unincorporated Jefferson County have met the criteria.
Houghton took the initiative after a fire started in the foothills near U.S. 285 in July 2022. The flames of the Snow Creek fire were clearly visible from Willow Springs. Pre-evacuation orders were in place and traffic was stopped on Belleview. “People were trying to get in, trying to get out. They didn’t know what to do.”
(Photo by Jintak Han/The Denver Post
Houghton and his wife began loading up items they thought were important to take with them in case the fire turned their way. “If the wind had moved unfavorably, it probably would’ve taken a lot of houses out,” Houghton said. “Luckily, the wind kind of died down and the helicopters started moving.”
The Willow Springs community and the various homeowner associations manage about 800 acres of open space. Some of the residents closest to the open space have had their home insurance policies canceled because of wildfire concerns. People’s rates have increased. Some have been told to work with a wildfire mitigation specialist to cut their risk or face losing coverage.
“This is part of the urgency. I’ve been screaming it as loud as I can in my community,” Houghton said. “It’s either going to be a fire or it’s going to be the insurance company. At some point, all of us are going to be affected.”
Assessing the conditions on the ground
Both Walker and Conway said the Colorado insurance market seems to be stabilizing somewhat when it comes to nonrenewal of policies.
“We’re still going to see premium increases throughout the western half of the country,” Conway said.
A new state law is an attempt to help rein in rising premiums by assessing the conditions in areas at risk for wildfires. The legislation, House Bill 25-1182, requires insurers to consider mitigation efforts at the property and community levels in modeling used to gauge risk and set premiums. Most of the modeling is done by third-party companies, not the insurers, Conway said.
“Those models are really making most of the decisions in our market for insurance companies, both where they’re willing to write insurance coverage and how much they’re willing to charge,” Conway said. “We had real concerns that the models weren’t doing a sufficient job of building mitigation into them that people are doing, either on their individual property but at the community level as well.”
The law is intended to make sure that models incorporate the work being done, Conway added. Companies will have to provide written explanations of wildfire risk scores and their impact on pricing and coverage. Policyholders can appeal their scores.
Companies will be required to publicize any discounts available for mitigation work. The state will also make the information public.
Conway said there aren’t a lot of discounts currently available for wildfire mitigation, but there are for fortifying a house’s roof against hail. Rules are being written for the law, which will take effect in the middle of 2026.
A provision of the legislation requires scientific standards be applied to specific properties to ensure “meaningful, verifiable” mitigation. Walker said those involved will likely look at a program of the Insurance Institute for Business and Home Safety. The institute conducts reviews and in-person inspections of homes and properties before it certifies them as wildfire-prepared.
The law is a good start, said Lisa Hughes, the Colorado liaison for United Policyholders, a nonprofit representing insurance consumers. She said it would help if the state provided incentives to cover some of the costs of upgrades to homes.
Boulder County’s wildfire mitigation program, Wildfire Partners, has provided financial and technical assistance to residents since 2014 to save homes and help people obtain and retain insurance coverage. The 24-member team partners with the Insurance Institute for Business and Home Safety and its experts conduct in-person assessments and inspections to reduce risks from wildfire and get homes certified by the institute.
“We understood 12 years ago that we’ve entered into a new era of climate-driven wildfire. Looking 10, 20, 30 years out, we have to get our homes prepared and mitigated,” said Jim Webster, the program’s manager.
Boulder County voters approved a 0.1% sales and use tax in 2022 to finance projects and expand the program’s reach across the county.
Amanda Hill doesn’t live in the foothills of Boulder County. She’s never filed any claims. But eight months after buying a duplex in Denver’s Washington Park neighborhood in 2024, her insurance company told her she would have to replace her roof or find another company.
“I was at home on a Friday working and got a text message out of left field. Zero conversations had been had,” Hill said.
The fact that Hill had given her insurer proof that the roof was replaced 10 years earlier didn’t seem to matter. She quickly got quotes from other companies and found a new policy for $5,000 a year, up from the $1,600 she originally signed up for.
“I had no choice. It was either that or spend $30,000 on a new roof,” Hill said. “It just feels like are no consumer protections and there’s no recourse.”
Industry and state officials say they continue to look at ways to bring more stability to the market. A bill that failed in the legislature this year would have set up an enterprise fund statewide to provide reinsurance to companies that offer policies in high-risk wildfire areas. Reinsurance is the insurance that insurance companies buy.
Conway expects the legislation to be reintroduced in the 2026 session. Walker said while the bill was well-intentioned, it would have required companies that made a profit to refund money to policyholders. She said most years in Colorado, for every dollar a company makes in premiums, it will pay out $1.25 in claims.
Walker said companies need to be able to keep some kind of a reserve when it comes to property insurance. “We never know what mother nature is going to do.”
The last resort
One program designed to give homeowners and businesses some relief is Colorado’s insurer of last resort. Fair Access to Insurance Requirements, or the FAIR Plan, was approved by lawmakers in 2023 and began offering home insurance in April and commercial insurance in July.
The plan is geared toward homeowners who can’t get coverage through the traditional insurance companies, many times because they live in hail- or fire-prone areas. People have to show they’ve been turned down by at least three companies.
The policies pay up to $750,000 of the cost to replace a house, but don’t include certain features of typical home insurance, such as coverage for liability and water damage.
People must use a broker or licensed insurance agent to apply for the FAIR Plan. Kelly Campbell, the program’s executive director, said about 800 agents are registered with the plan.
So far, interest in signing up for the program has been steady, but not overwhelming, which Campbell said is preferable to fast growth. “We really are that insurer of last resort.”
Insurance companies pay assessments to the FAIR Plan based on their share of the Colorado market. Companies have paid a total of $50.5 million. Campbell said the program is insuring about $64 million dollars worth of exposure and has policies in 30 of Colorado’s 64 counties.
There are 38 similar programs around the country. Campbell said the FAIR Plan is part of a multi-pronged approach to dealing with Colorado’s expensive, high-risk insurance market.
“We really have to look at things like mitigation, finding ways for communities, when they do suffer a loss, to build back in a more resilient way,” Campbell said.