The storm hit the small farming town in northeastern Colorado on a spring evening in 2024. Throughout the town of Yuma, tornado sirens blared, lightning lit up the sky, and hail thrashed down. Hailstones the size of baseballs pummeled roofs and broke through the windows of homes, destroying furniture and flooding rooms. rooms. Damn, there's water all the way to that back corner. It lasted less than an hour, but by the time the storm ended, people had to wade through knee-deep ice and floodwaters in the street. Mother Nature was brutal. She was brutal. The hailstorm left the town reeling, and more than a year and a half later, its roughly 3,000 residents are still dealing with the damage. Well, this is one of the residences that you can see that the vinyl siding didn't hold up at all. This is the way all vinyl siding was in town. Kevin Means drove us through his hometown. So this church here, all these, everything, all these stained glasses on this side of the building were wiped out. Kevin is a local contractor, and since the storm, he's been working nonstop. repairing homes. He estimates that 99% of roofs were destroyed, even the ones with the most hail resistant building materials. Yuma has had a lot of hailstorms come through over the years, but this latest one really exacerbated one thing in particular, the shaky state of homeowners insurance. When our insurance renewed this year, it went up about 2,000 per year. There's a lot of insurances that won't cover this area. We have to either stay with what we've got or there's a lot of people that can't afford the insurance. Any insurance we've gone to is like, well, you have too many claims. We can't insure you. So we have had a really hard time finding insurance. What people are dealing with in Yuma is happening across the state for a variety of reasons. Colorado homeowners are facing rising premiums, less choice and availability, and in some cases, getting dropped from their insurance altogether. Colorado is now one of the top 10 most expensive states in the country for homeowners insurance. In the last five years, premiums have gone up 65%. And escalating the issue is climate change. Colorado, like the rest of the country, is experiencing more and worse weather-related disasters. raising questions about the future of the home insurance market. This is Purplish from CPR News and the Colorado Capital News Alliance, a show about Colorado politics and policy. I'm Benta Birkland, and joining me for this episode is Andrea Kramer, a senior producer at Rocky Mountain PBS. Hi, Benta. We've been traveling across the state to learn what homeowners are dealing with when it comes to insurance. And the bottom line is, it's not great. Colorado is what's known in the insurance industry as a dual catastrophe state. The two catastrophes being wildfires and hail. Almost half of the state's population live in what's called the wildland-urban interface. It's the area where homes and businesses butt up against forests and open spaces, making them vulnerable to wildfires. On top of that, the Front Range and Eastern Plains experience frequent hailstorms, to the point that some parts have earned a nickname I can't imagine any community wants to have. Hail Alley. Since 1980, Colorado has had more than 50 weather-related disasters — fires, storms, floods, that each caused more than $1 billion in damages. And it's getting worse. Most of those disasters were in just the past decade. For instance, Yuma, that was a billion-dollar storm. And that's a very small town. Climate change isn't the only reason billion-dollar disasters are happening more frequently here. A lot more people live in Colorado now, and the cost of replacing buildings and property after disasters just keeps going up. Each disaster adds up for insurers who pass those costs on to policyholders. This is something that state lawmakers like Boulder Senator Judy Amabile have started really worrying about. When we talk about the cost of housing, we have to talk about insurance as part of that. That is absolutely becoming a significant part of somebody's monthly cost to own a home or to rent, because those costs are going to get passed through one way or another. In this episode, we'll look at what's happening with the home insurance market in Colorado, and what state lawmakers are trying to do to make sure that when the flames approach or the hail falls, Coloradans don't lose everything. Homeowners across the state are dealing with three major insurance issues. They're facing massive premium increases, they're getting dropped by their insurance companies, or they're living in a part of the state where standard insurance companies no longer even offer protection. We had been with our homeowners insurance for about 27 years, and actually in all those I think only filed like two claims with them. And we were notified in 2021 that we had four months and they were canceling our policy due to where we lived. I'm a retired truck driver and farmer. They want like $500 a month for insurance. And that's an awful lot. But you know, you need to have something. When our insurance renewed this year, it went up about $2,000 per year this year. That was a big hit. My business went up about $100 a month. We wanted to understand what's been going on in the insurance industry to cause some of these changes. So we spoke with Carol Walker. She heads the Rocky Mountain Insurance Association and is an industry lobbyist. I've been in my role for 26 years and we are in the most challenging property insurance market that we've seen in a generation. Carol said insurance companies factor in all these costs when they figure out premium rates. So higher costs for insurance companies generally means higher costs to you, the homeowner. Unfortunately, in Colorado, we have some of the highest premiums in the country because of our risk, because of the costs associated with claims. Yeah, actually, insurance rates are higher here than states like California and North Carolina. Governor Jared Polis says he's very concerned about these high rates. It's a major crisis in Colorado and a number of other states in that it has insurance costs for homeowners has gone up far above the rate of inflation. Since 2007 rates in Colorado have gone up 233 That kind of puts the price of eggs in perspective But it not just the cost that the governor worried about It also availability We also have many homeowners who have a lot less choices, even some down to one choice, and who to insure with less competition also means higher rates. So it's become a major problem. I grew up in California, and insurance has been a pain point there for quite a while. So when we started working on this, one thing I was curious about was, are we in the same situation as California, where some insurance companies have left the state entirely? I mean, after the recent L.A. wildfires, I certainly saw a lot of things in the news about the struggles of California's insurance market. So I was pretty surprised when we heard both Colorado's governor and insurance commissioner say that's not as much of an issue here. I'm not concerned about insurance companies wholesale leaving the state. That's insurance commissioner Michael Conway. I'm concerned that some insurance companies may make choices not to write in certain parts of the state, not to provide coverage in certain parts of the state. And that will drive up the affordability challenges in those parts of the state. And that actually is already a reality in Colorado. It is happening. Companies aren't leaving all of Colorado, but pockets of the state are starting to become insurance deserts. So we met with insurance broker Steve Hakes, who walked us through some of the ways insurance companies are scaling back. This one's actually Allstate. You can see this is you've got three columns of zip codes that are simply ineligible to be written in any of those particular areas. So you can see, again, Boulder, Nederland is in there. Kind of see a little area of this kind of Broomfield Commerce City area. But this isn't just a problem for individual homeowners. It has the potential to destabilize the entire housing market. Everybody can understand why it is a big problem if you can't get any insurance at all, because that will have a chilling effect on people's ability to sell a home, to buy a home, to have a mortgage on a house. We don't want that to happen. I don't think anybody wants that to happen. Because you need insurance to get a mortgage, state lawmakers like Senator Judy Amable made a decision to step in and get the state involved in a very direct way. It became clear that we are going to have neighborhoods where no one is willing to insure. And so two years ago, we ran a bill to set up this fair plan, and that is an insurer of last resort. The FAIR plan offers limited state-backed coverage for properties at extreme risk of disaster. And if you go to their webpage, they're very upfront. These plans are more expensive than traditional insurance, so it really is only there as an option when no other company will write you a policy. The idea had broad bipartisan support at the state capitol and officially debuted this spring. As of this December, the FAIR plan has sold about 140 insurance policies. That's right, Benta. And that coverage is not just being used in fire-prone mountain areas. The executive director of the fair plan told me that there's policies already in more than half of the state's counties, including some folks in the eastern part of the state. When we started with the fair plan, our hope was that no one would ever need it. But we are already seeing that people do need it. And I would expect that number will grow dramatically in the next few months as people hear about the fair plan and as more insurance companies start to turn people down. And we should be clear, the idea of a fair plan isn't unique to Colorado. States like California and Washington first started offering plans like this in the late 1960s. So there are now fair plans in more than 30 states. Yeah, that's right. And while the state set it up, the money doesn't come from the state budget. It's funded by a fee on insurance companies. And to make it all work, the payouts are pretty limited. they're capped at $750,000. So if your home is worth more than that and it burns down, the fair plan will not cover a lot of the losses. You'd have to find other types of supplemental insurance or just pay out of pocket. Being underinsured like that is a real risk for homeowners, even for those who have private insurance. And that issue was front and center after the Marshall Fire in Boulder County. It was the state's most destructive, and an estimated three-quarters of people who lost their homes didn't have enough insurance to cover rebuilding. We met a couple who went through that, Manu Sobdi and his wife Amita and their two children. They live in Superior, a suburb of Boulder. They'd been living in their house for more than a decade and had homeowners insurance and thought it was sufficient. Manu remembers the day of the Marshall Fire clearly. It was in late December 2021. The family of four, they were actually on a beach vacation in Mexico, enjoying their kids' winter break, when they started hearing that their subdivision was on fire. Morning, we had, like, breakfast, and suddenly, like, you know, the calls and texts start coming in that, hey, where are you guys? Manu and his family watched the whole thing unfold, from the ring camera on their house. Being that far away was, like, definitely helpless. You couldn't do anything. It turns out losing their home was just the beginning of a long, drawn-out and arduous saga. They decided to rebuild in the same location and stay in the community they'd grown to love. And they wanted to build what's called a passive house, a home that's more energy-efficient and fire-resistant. If we are in the same location, we are now fire-brown. So at least in my mind, I was like, no way am I building the same construction and letting this happen again. But as they rebuilt, that's when they realized just how underinsured they were. They ended up spending a million dollars out of pocket. Half of that money was to rebuild a new home, and then half of the money was used to replace all of the items that burned inside their home. Right. Because they were in Mexico when the fire happened, they didn't have like a go bag or anything. They lost everything. The only thing that ironically actually survived the wildfire was their washer and dryer. And I can imagine like that is not going to be the two items you're most attached to that you even care if they survive. But Manu told us that his insurance company treated him fairly. The company paid what they were owed under the policy. It's just that the policy didn't come close to covering everything they lost. The concept of insurance is there. You feel safe. At least it covers you a bit. But it's still a big financial liability to be able to build back. And this problem is actually really common. One study we looked at found more than half of people are underinsured. And there are a lot of reasons it can happen. Not updating your policy after a big renovation. Not including things like jewelry or artwork in the plan. Or not adding extra coverage into the policy in case rebuilding costs end up higher than expected. Manu's family said there are some things they've learned about homeowners insurance that they think other people should pay attention to. Like review your policy each year know what you insured for really read through your policy to see what it covers and what it doesn and ask questions if you don understand But making sure people have sufficient insurance is only one part of the puzzle. Lawmakers are also trying to make it more affordable in the long term. But that could require some big changes at our houses and in our communities. And that's what we'll get into next. This is Purplish from CPR News and the Colorado Capital News Alliance. You love podcasts to keep up with the news. Now there's an easy way to find out what's happening in Colorado every day. The Colorado Today podcast is new from the same trusted source that brings you Purplish. You'll get the top stories, on-the-ground reporting, and moments of curiosity. Follow Colorado Today for the statewide news you need each weekday on Apple, Spotify, or wherever you get your podcasts. This is Purplish from CPR News and the Colorado Capital News Alliance. Andrea, before we did all this reporting, going into it, what did you think was the main driver of rising insurance costs in the state? Fires. I definitely thought fires for sure. And I would have said the same thing. But it turns out we were both wrong. And here's what Insurance Commissioner Michael Conway told us. The amount of premium that people pay on average across the state is comprised roughly of 60 to 70% of hail risk. And just to reiterate this point, that 60 to 70% is across the state, even in places that don't have hail. Yeah, after seeing what happened in Yuma, it does make a lot more sense to me that hail is the main problem in Colorado. That storm lasted less than an hour, but it costs more than a billion dollars. This gets us to Governor Polis. He thinks he has a way to help keep homeowners premiums stable, despite big disasters like that. He wants to set up a program for people to buy hail-resistant roofs at a reduced cost. So basically an incentive program. Yes. And a lot of people don't buy the hail-resistant shingles because they are significantly more expensive. But Polis thinks people have to start getting them. In many senses, hail is an easier problem to deal with than fire because it's a simple intervention. And he casts it as something people should be doing for the common good. At the end of the day, the more hail-proof roofs we have, especially in the eastern front range, Aurora, East Denver, etc., the lower rates are going to be for everybody. Just to be realistic here, these hail-resistant roofs aren't a miracle cure. They definitely help a lot, but in some severe storms like the one in Yuma, sometimes even those shingles don't hold up. True. For such an intense storm like that one, it's not going to save most roofs. But industry experts say these hail-resistant shingles can withstand a lot of storms without damage. So the governor wants to help people afford these roofs. And he took that idea to the legislature in the last session. Yeah, he backed a bill that would have set up an incentive fund. and it will be paid by a 1% fee on every homeowner's insurance policy. That money would have paid for two things, based on Colorado's two most common disasters, grants for hail-resistant roofs, as well as money for insurers to offset some of their losses so they keep offering plans in wildfire risk areas. It's an interesting idea, but it's still just an idea since the bill didn't pass, is that right? Right, it did not pass. Republicans opposed it, and so did enough Democrats in the governor's party. It failed. The big sticking point was this fee, and that it ultimately took too much money out of homeowners' pockets. It's kind of funny because Polis, on other policies and health care, he's been very opposed to fees. But in this instance, he supports it because he said in the long run, it will lead to lower costs. Got it. So is this the end of it then, or will Polis try again? This is his last year in office, so he really only has one more shot at this. Yes, they are going to bring this bill back in this upcoming session. I talked to the Polis administration. It might not be in this exact same form. It may or may not have that fee, but they're not giving up on this idea. Having said that, Senator Amabile, who sponsored the bill that failed, says it can be hard to get other lawmakers focused on this issue. There are just so many other pressing concerns in the state. No one runs on, I'm going to take on the insurance, the homeowners insurance industry. Like, that's just not a campaign talking point. It isn't sexy. It doesn't get a lot of press. It's nothing that I think anybody ever dreamed of. Oh my gosh, I'm going to run to solve this problem. But it is a real problem and our constituents are really being impacted by it. That roof idea from Polis. It's an example of mitigation. The idea that we need to do something proactive to save our homes and keep our insurance rates down. The real silver bullet isn't a silver bullet. It's long-term commitment to risk reduction and mitigation. That's Carol Walker, the insurance industry lobbyist. Mitigation is her watchword. She says Gulf Coast states have gotten better at mitigating for hurricanes community-wide. And she hopes the same can happen in Colorado for hail and wildfires. You need to do the mitigation. Your neighbor needs to do it. And then it needs to be at scale because we know for wildfire, fire doesn't care. It doesn't know any boundaries. So I think the commitment we need as a state is how can we put these mitigation programs in place? Some parts of Colorado have really stepped up with doing mitigation. and Boulder County really stands out. Yeah, Boulder County runs a program that helps homeowners harden their homes against wildfires. They have specialists who will come to your property and work up a laundry list of things you need to do. Something you always want to make sure you do is clean your roof off a couple times a year. So anytime you have a place where pine needles accumulate, that's also where the embers are going to accumulate. And we just don't want a pile of pine needles to start fires. Boulder County's program, Wildfire Partners, started a little more than a decade ago. Since then, it's performed more than 4,000 home assessments. Here's manager Jim Webster. So it's true, people who have never evacuated for a wildfire might be reticent to perform mitigation. But our risk is increasing. Every year, we have more and more interest from our residents. As wildfire risk increase and people see on the news Los Angeles or other fires from across the country, they recognize that with climate change and our new era of climate-driven wildfires, they need to take action and they need help. What makes Boulder program unique is that it offers a certificate to homeowners who completed all the necessary mitigation work And that can be really important to insurance companies A lot of insurance companies in Boulder County have renewed policies based off of that certificate when they otherwise wouldn't have. We met with two people who know that firsthand, Nick Schneider and his wife, Erica Ellingson. Their house is in Stone Canyon. It's a scenic valley just outside of the town of Alliance, and it's surrounded by hills and prairie grass. Over the years, they started getting more and more aware about the fire risk they faced. They have a wooden house with cedar siding, and they knew they needed to take action to protect their property, but like a lot of people, they kept putting it off. I'll admit it. I was the foot dragger. I just didn't want to hear that we were going to have to, you know, pave the whole area around the house, cut down favorite trees or anything like that. And then... Then we got the letter from our insurance company that said, we will not renew your insurance because of the risk of wildfire. And so, of course, we panicked. So they turned to wildfire partners for help. Nick and Erica put in long hours removing brush and grasses around the house and fortifying their wooden decks. They tackled the yard, but they were still able to keep some of their favorite trees and still have a beautiful garden. And they were also able to keep their insurance. Boulder County certified the work was good and the insurance company renewed their policy. And then this next part, it's kind of hard to believe it, but it is true. Literally, just months after doing all this work in July 2024, a wildfire ripped right through the neighborhood. The Stone Canyon fire. It was very surreal. When I looked out the window and I saw the trees on fire so close to the house, I couldn't believe it for a moment. And I looked at it and then I really thought to myself, yes, this is it. This is that moment that we've been afraid of. The wildfire approached the house from all sides, but amazingly passed them by. It went right up to the edge of our mitigation, but it left that little perimeter and our house did not catch on fire. The Stone Canyon fire ended up taking five homes, but not Nick and Erica's and not any of the other nearby homes that wildfire partners certified as mitigated. We hadn't gotten that kick in the pants from our insurance company. We wouldn't have done it then in time. And for certain, our house would have been lost in that fire. So the mitigation work really saved their home and helped them keep their insurance. Implementing large-scale mitigation programs and getting a lot of homeowners to do it is not an easy task. It takes money, time, and effort. Voters in Boulder County approved a tax to help pay for the program. Jim Webster, the guy who runs the program, said his organization worked closely with the insurance companies, so they would trust the county's certification. But that's not the case across the board. One insurance broker told me he knows of homeowners who fully mitigated their homes but still got dropped by their insurance. And it's not clear necessarily to homeowners how their insurance rate is calculated and what type of mitigation work they need to do. And that's why the state is trying to make the whole process more transparent. Yeah, let's get into that. Bento, walk us through what they passed this session. Lawmakers passed a bill to require insurance companies to tell homeowners how much risk the company calculates they're at. And then provide information on what they could do to lower that wildfire risk. Companies also have to tell customers what discounts the company offers for mitigation. So does that mean if people can prove that they've mitigated their homes, they'd be offered lower insurance rates? That's the ultimate goal. But right now, Colorado doesn't require insurance companies to offer discounts. Companies do have to factor mitigation into the price. But they also consider community-wide mitigation when they calculate rates, like what your whole neighborhood is doing. So it might not be enough for just one individual homeowner to get a discount for hardening their home. So do you think the state would ever require property owners to mitigate? And I know a lot of homeowners are probably also wondering, could insurance companies be required to offer discounts for mitigation? I asked the insurance commissioner about both of those ideas, and he said not yet. But both he and the governor are open to imposing mandates eventually. And this isn't necessarily just a democratic approach. Texas, which is another big state for hail, does require insurance companies to lower rates for people who install the hail-resistant roofs. But this is Polis' last legislative session, so it'll likely be up to the next governor to decide if this is the direction Colorado should go. The two big things we've talked about are the growing inaccessibility of homeowners insurance across the state, both in price and availability. And throughout this reporting, I learned and it just reiterated how multifaceted and complex this whole issue is. Yeah, for sure. And the state is certainly doing some things to solve for this issue. But I'm still really curious what will happen if our state faces another Marshall Fire type event. Right now, it seems like insurance issues are a problem in the state, but they're not yet Armageddon. But who's to say what will happen if, or I should say when the next major disaster strikes. And I was surprised to see how many homeowners and communities are already invested in mitigation. As we saw with Nick and Erica, it really can work. It saved their home. And I think mitigation will become increasingly more prominent across Colorado. And there are plenty of communities already doing it. But we're just going to see more of it as climate change gets worse. Yeah. And on the personal side, I've never bought a house. but reporting on this makes me pretty worried. I'd love to live in some places like Boulder or Golden, but now I think I know a little too much about these insurance issues. Maybe one lesson from all of this is that individually, every property owner does play a role, but it's going to take communities working together to keep insurance here and keep rates down. And a quick plug, you can see the reporting we did in an upcoming documentary from Rocky Mountain PBS on this topic. We're calling it Undercovered. and it's coming out in mid-January. We'll have more information on where to find it in the show notes, so keep an eye out for that. That's it for this episode. Purplish is a production of member-supported Colorado Public Radio and the Colorado Capital News Alliance. The CCNA is a collaboration between KUNC News, Colorado Public Radio, Rocky Mountain PBS, and the Colorado Sun, with support from news outlets throughout the state. Funding for the Alliance is provided in part by the Corporation for Public Broadcasting. I'm Andrea Kramer. And I'm Benta Berkland. Our producer is Stephanie Wolfe. Sound design and engineering by Shane Rumsey. Megan Verlee is our executive producer. Our theme music is by Brad Turner. Purplish is taking a break for the holiday season. We'll be back in the new year with a preview of the 2026 legislative session. Subscribe now so you don't miss an episode. This is Purplish from CPR News and the Colorado Capital News Alliance.
