Homeowners insurance rates in Colorado have been steadily on the rise, and for many homeowners, this can cause serious financial strain. You’re not alone if you’ve been wondering, “What gives?” Below we’ll break down some of the factors contributing to increasing insurance premiums as well as what you can do to ensure you have adequate coverage without breaking the bank.
Here’s a breakdown of some of the reasons homeowners insurance rates are going up in Colorado and what you need to watch for in your policy coverage
Frequent and Severe Weather Events
Like elsewhere in the country, severe weather events are increasing in frequency and intensity. For us in Colorado, this means an increase in destructive weather-related events like hail storms and wildfires.Colorado, especially along the Front Range, is one of the most hail-prone regions in the U.S., and the extensive damage is driving up the cost of repairs and insurance claims. Moreover, wildfires often result in total property losses, which can be incredibly costly for insurers.
Increased Claim Frequency
Not surprisingly, when you have more severe weather, you also get more homeowners filing insurance claims. More claims equal more payouts, and when insurance companies’ costs rise, they pass those costs off to policyholders in the form of higher premiums.
Inflation
Another contributing factor to rising insurance premiums is that overall building costs have increased. The amount it takes to rebuild or repair homes has surged due to inflation and supply chain issues. This, in turn, raises the amount insurers need to pay out for claims and, like a domino, causes premiums to rise.
What to Look Out for In Your Insurance Policy
Rising insurance premiums is one way in which insurers pass off increasing expenses to homeowners. They also do so in perhaps less obvious ways. Policyholders need to be careful to fully review their coverage so they aren’t surprised by a claim denial or underpayment. For example, many policies include a separate wind and hail deductible to cover the increased costs that come with destructive hail storms. These are generally a percentage of your home’s insured value versus a flat fee that’s associated with standard deductibles.
Another way insurance companies try to limit payouts is through policy exclusions. Be aware if your policy has endorsements like a cosmetic damage exclusion, matching exclusion or pre-existing damage exclusion.
Contact Us at KK&P Law with Questions
Homeowners insurance rates in Colorado continue to rise due to a combination of factors. Consider reviewing your policy annually and shop around for better rates. Keep in mind, however, that insurance policies will vary in their coverage and exclusions. It’s critical to review your policy closely and ask questions about areas you don’t understand. Often policy language can be ambiguous, and this can lead to contention between insurers and their insured. At times like this, we advise speaking with an insurance law attorney.Contact our team at Kandell, Kandell & Petrie Law Firm for insurance claim representation in the greater Denver area and throughout Colorado.
