Homeowner’s insurance rates skyrocket in Colorado
COLORADO SPRINGS, Colo. (KRDO) - Colorado Springs residents may be seeing a steep increase in their homeowner's insurance rates this year. Industry expert and Executive Director of Rocky Mountain Insurance Association, Carol Walker says that the rise in rates is only getting worse thanks to nationwide inflation and more region-specific natural weather events.
"Both hail and wildfire risk collide with what we see as one of the hardest insurance markets in a generation. That means everything that insurance pays for is more expensive, everything from lumber to labor to glass, everything to repair and rebuild a home," Walker said.
The Van Wyk family is a victim of Colorado's notorious hail damage. They say that after their insurance premium went up $60 a month, a storm hit their house and totaled one of their cars in August of last year. While the family was out, they came home to damage they'd later find out would cost $40,000 to repair.
"Pretty much right away we noticed significant damage," Nathan Van Wyk said.
The Van Wyk's are still in the process of getting everything fixed and are an example of one of many, dealing with the damage Colorado's extreme weather can extol.
However, someone has to pay for all that damage. According to Walker, it's consumers and major insurance companies.
"As we see these premiums go up, insurance companies have to adjust their premiums," Walker said. "At the same time, insurance companies are still losing money in this market."
Colorado is among one of the worst states for profitability in the Union, according to data obtained by the Colorado Division of Insurance, meaning that these companies are feeling the stretch just as consumers are.
A release from Nationwide confirms this information:
"Inflation and market disruptions impact insurance just like they do any other business. In many instances, this means we are updating our rates. It also means we are being more selective about where we write certain amounts of business and the amount of overall risk we are willing to write. These are tough decisions, but the right decisions that will enable us to be here long term for our customers."
- Nationwide Spokesperson
However, there are things that consumers can do to mitigate increasing homeowner costs. Walker said that wildfire mitigation efforts on the property and hail-resistant roofs can go a long way to prevent extra costs. More than that, Walker warned against "maintenance" type claims, or claims that barely met a policy's deductible.
"In this current environment, you don't want to do an insurance maintenance claim ... But if you do have severe damage to your roof or a tree falls on your roof, that is something where you can decide to pay for that out of pocket," Walker said.
She went on to say that having too many claims on your policy can put you at risk for non-renewal.
"You don't want to file multiple claims over a short period of time that could put you at risk for non-renewal, especially by a preferred carrier," Walker said.
