Wondering why home insurance premiums in Colorado are on the rise?
Here’s a quick breakdown:
Record Number of Catastrophe Claims
Colorado has been hit hard by natural disasters, leading to a surge in claims and higher costs for insurers. We have seen a record number of claims industry wide in our state from hail, fires, and flood.
Increased Costs of Supplies and Labor
With the cost of materials and construction labor skyrocketing, insurers are facing higher costs for rebuilding homes. We are still dealing with cost related issues from supply chain problems during the pandemic.
The Reinsurance Market
Insurers use reinsurance to protect against large losses, but with rising costs in the reinsurance market, premiums are going up. More in more insurers have pulled out of the state or are ceasing new business because they did not have enough in reserves to cover claims and remain profitable. They are having to buy more reinsurance to protect themselves and that cost is being passed on.
Rise in Litigation
More legal disputes over coverage and claims mean higher costs for insurers, which are passed on to consumers. Currently there is a case dealing with the Marshall fires.
In fact, average homeowners insurance premiums in Colorado have jumped over 50% in the last two years!
We’re here to help you navigate these changes and find the best coverage options for your needs. Have questions? Reach out to us anytime!