Colorado Statutes Address Potential Problems with Property Insurance

It’s well known that the increasing number and severity of natural disasters such as fires, floods, hurricanes and hail has impacted property insurers to the extent that some insurance companies have decided to stop issuing policies in certain locations. Colorado Springs attorney and business columnist Jim Flynn reports that a study published by the Colorado insurance commissioner says our state ranks fourth worst among states where property insurance companies have been operating at a loss. Insurance companies continuing to issue policies in Colorado have often dramatically increased premiums. The Colorado General Assembly this year passed two bills meant to address the concern that property insurance in Colorado could become hard to find and/or prohibitively expensive. One bill, HB23-1288, the “Fair Access to Insurance Requirements Plan Act,” creates a new agency with a nine-member board representing various parts of the insurance industry and the interests of consumers. This board is tasked with creating an insurance plan that will provide property owners with coverage for their property in high-risk areas and/or who have been rejected at least three times by insurance companies doing business in the state. Think of it as an insurance product of last resort. Insurance under the plan will be limited to $750,000 for residential properties. Flynn says policies under the plan most likely won’t be available until 2025. A second bill passed by the 2023 Legislature, HB 23-1174, simply extends to 60 days from the current 30 days the time an insurance company must give advance notice of non-renewal or termination of property insurance coverage. This bill includes new rules concerning “full replacement cost” insurance, a step up from “actual cash value” coverage, which may or may not be adequate to rebuild your property if it is destroyed.