Fire-related insurance challenges to blame for high HOA fees in Colorado, says insurance division

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It’s not just rural mountain communities in Colorado that have to worry about wildfire risk anymore, and insurance companies know that. 

The ability to live so close to nature and open spaces is a big part of why people choose to live in Douglas County. But it’s also the reason the county is in the top 10 in the country with the most properties vulnerable to insurance correction due to fire risk.

Homeowners in Castle Rock’s Latigo Community were shocked to learn their monthly HOA fees would soon increase from $300 to over $800.

RELATED: Colorado homeowners left with more questions than answers about skyrocketing HOA insurance

“It was a gut punch,” said Latigo homeowner Sibyl Swope, “that’s my mortgage payment. My mortgage just doubled.” 

But the problem runs deeper than their HOA. 

“This isn’t an issue that is unique to Latigo or even the state of Colorado,” said Ryan Hurley with Assure Partners. 

Hurley is the insurance broker working with Latigo’s HOA. He says reinsurance markets are hardening across the country after recent significant losses. 

Nine out of the top 10 most costly wildfires have happened since 2017. Some, like the Marshall fire, were in urban areas previously believed by insurers to be lower risk. 

“The industry is ultra-focused on wildfire right now. So communities that are exposed to that or in proximity to wildfire zones are seeing eligibility issues,” said Hurley.

Hurley says, in Latigo’s case, their insurer pulled out of the townhome market nationwide, and because of their location, the cheapest coverage he could find costs about 600% more.

RELATED: Castle Rock community HOA fees skyrocket after insurance premium increases by 600% in Colorado

“A property like Latigo that is insured with an ultra-preferred carrier like QBE insurance, when QBE pulled out of the market and the insurance industry redefined the wildfire zones, Latigo went from extremely preferred pricing to ultra-high risk pricing,” said Hurley. 

“It is going to be a continuing challenge. This is definitely climate-related. There used to be a wildfire season. Now the wildfire season is year-round. We saw that with the Marshall Fire,” said Vincent Plymell with the Colorado Division of Insurance. 

The Colorado Division of Insurance regulates the insurance industry. While they don’t have the authority to cap premiums, they’re holding stakeholder meetings to explore other affordability solutions. 

“It’s something that we as regulators and the industry have to figure out a way to plan for this,” said Plymell.  

There is recent legislation called the “FAIR Plan” that aims to provide last resort insurance to those who can’t find affordable coverage, but that likely won’t be available until 2025. 

If you have a question about insurance, you can contact the State’s Division of Insurance Consumer Services Team at 303-894-7490, or email [email protected], or doi.colorado.gov, and click on “file a complaint.” 

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