Colorado Homeowners Face 58% Insurance Cost Rise Over Wildfire Risk

Homeowners in Colorado are facing sharply rising insurance premiums due to increased wildfire risks, with the state ranking sixth-highest nationally for insurance costs. Average annual premiums have surged 58% from 2018 to 2023, largely because of wildfire-related losses and growing development in wildfire-prone wildland-urban interface areas, affecting over 321,000 homes. Insurers in Colorado, which has a less regulated market, have mostly managed risk by raising premiums rather than extensively withdrawing coverage, unlike in states such as California and Florida. The risk of underinsurance is significant, with many homeowners lacking sufficient coverage to rebuild after losses, exemplified by the Marshall Fire where a majority were underinsured. In the broader Western U.S., wildfire seasons have been hotter and more frequent, causing large-scale destruction including in Oregon and the Grand Canyon, with thousands of firefighters deployed to protect communities. Experts emphasize that while firefighting efforts are crucial, effective wildfire prevention requires proactive measures such as prescribed burns, vegetation management, and integrating indigenous knowledge to reduce fuel buildup and restore ecosystem health.