Signed! New Law Will Reduce Property Insurance Costs

New law improves accountability from insurance companies who use risk management models to assess price

LOUISVILLE, CO - Governor Jared Polis yesterday signed legislation into law that will help Coloradans save money on their property insurance policies by requiring transparency in wildfire mitigation risk models and how they impact an individual’s insurance policy.

“When Coloradans are properly informed about fire mitigation, they can be more strategic about the steps they can take to protect their property from fire damage and correct any errors in their insurers’ records,” said Rep. Brianna Titone, D-Arvada. “Insurance companies are increasingly using wildfire risk scoring and models to determine policy coverage and pricing, but the lack of transparency has left property owners confused about what they can do to reduce their risk and save money. This law promotes transparency and accountability in property insurance so Coloradans can take effective mitigation efforts that help bring down their insurance costs.”

“I frequently hear from constituents that they are being denied insurance or their premiums have increased dramatically. It has always concerned me that we incentivize and encourage mitigation, but there’s no way to tie these efforts directly to insurance," said Sen. Lisa Cutter, D-Jefferson County. “This new law addresses that, requiring insurers to consider mitigation efforts, provide transparency to homeowners on the wildfire risk models they use, and give them the opportunity to appeal directly.”

“Colorado Democrats’ fire mitigation efforts help Coloradans protect their properties against wildfires, and this law helps clarify how property owners can implement these strategies to drive down their insurance costs,” said Rep. Kyle Brown, D-Louisville. “This new law will improve transparency behind wildfire risk score calculations so Coloradans can take the action they need to save money and protect their property from wildfire damage.”

HB25-1182, also sponsored by Sen. Cleave Simpson, R-Alamosa, requires insurance companies that use risk management models to assess price according to risk of wildfires and other catastrophic events to provide thorough information about how the models impact an individual’s insurance policy with policyholders and the Division of Insurance in the Department of Regulatory Agencies.

Insurance companies must also accurately consider mitigation efforts from policyholders when assessing risk, implement and publicize discounts and rewards programs for mitigating risk, and clear a path for policyholders to appeal their risk classification data if they believe it’s inaccurate. Insurers are required to respond to an appeal with a decision within 30 calendar days.