Lisa Lewis was curious to see what $500,000 worth of wildfire mitigation work in her mountain community might do for her homeowners insurance premium. 

Her Summit County neighborhood, situated mere feet from U.S. Forest Service-owned land at the base of the Gore Range, was among the first in the country to implement a fuels reduction project in a protected wilderness area in 2022. By partnering with the county and Forest Service officials, homeowners were able to remove dead pine trees across 28 acres, breaking the path of potential wildfires that could erupt nearby. 

Their efforts were recognized with a certificate from Firewise USA, a national program that promotes community-level wildfire mitigation work. But when Lewis tried explaining it to her insurance carrier, they “had no clue what I was talking about.” 

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“They didn’t even know that what we did actually lowers risk,” said Lewis, who never saw a reduction in her premiums as a result of the work. “It was maddening.” 

In mountain communities where the threat of catastrophic wildfires is ever present, homeowners like her have taken steps to limit their exposure. Yet it’s not uncommon for homeowners to say they haven’t seen those risk-reduction efforts lead to lower insurance costs. 

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In most cases, insurance rates only continue to skyrocket. 

The state saw a 52% increase in insurance premiums for single-family homes between January 2019 and October 2022, according to the Colorado Division of Insurance. 

Mountain towns have seen even greater increases. Premiums for multifamily buildings, like condominiums and townhomes, have increased in some cases upwards of 1,000% in recent years, according to local officials. 

Myriad factors are driving the issue, including more severe weather events fueled by climate change that have made Colorado a costlier state to cover. The state ranks second in the country for hail risk and third for wildfire, and is the third least profitable for insurers behind Louisiana and Texas, according to the Rocky Mountain Insurance Association.

Communities that have long prioritized mitigation efforts, however, want to start seeing credit for their work. 

“There’s no transparency about how the industry is determining wildfire risk,” said Eagle County Community Mitigation Manager Eric Lovgren.

A new state law aims to change that. 

House Bill 1182, which was signed last month by Gov. Jared Polis, requires insurance carriers to consider a homeowner’s wildfire mitigation efforts when assessing a home’s risk and the premiums they pay. 

It mandates that insurers publicize potential discounts for homeowners, provide information on how they calculate risk, and tell homeowners what they can do to lower their risk. Additionally, it gives homeowners the ability to appeal their risk score. 

Proponents of the bill are hopeful it will be a step toward curbing Coloradans’ insurance costs. Lawmakers also say they aren’t done with the issue, pledging to bring additional policy proposals forward next year. 

An incentive for homeowners ‘to do their part’

For Lewis, chasing a lower insurance premium wasn’t what drove her to support her neighborhood’s fuel reduction project. 

She said in communities like hers that face elevated exposure to wildfires, everyone must do their part to reduce risk and protect their homes. In addition to the community-wide project, she also invested in home hardening measures for her property, including adding fire-resistant window shutters. 

Still, she recognizes that a discounted premium can be a major incentive for homeowners to pursue such initiatives, especially as insurance costs skyrocket. 

A report from Insurify, a virtual insurance company, projects that average annual insurance premiums for a Colorado homeowner will be more than $6,000 by the end of 2025, making it among the most expensive states for homeowners insurance.

By making insurers more transparent about how they evaluate wildfire risk, as HB 1182 aims to do, Lewis said it will reward homeowners who do risk management and, in turn, spur continued mitigation work. 

House Bill 1182 requires insurers to consider “property-specific mitigation actions such as establishing defensible space, incorporating building hardening measures, or receiving certification from an entity with expertise in mitigation” when using a risk model or in the underwriting of homeowners’ policies. 

It also requires consideration of “community-level mitigation activities or designations, including forest treatment and other fuel reduction activities.” 

“Homeowners need insurance at a reasonable cost, and they also have to have a clear knowledge base of what to do,” Lewis said. “This (law) gives homeowners the incentive to do their part.”

Tony Cookson, a business professor at the University of Colorado Boulder, said transparency in the insurance industry is needed to drive more informed consumer decisions. 

He co-led a 2024 study on the fallout of the 2021 Marshall Fire that destroyed over 1,000 homes in Boulder County. By analyzing the contracts of nearly 5,000 policyholders who filed claims after the fire, the study found that 3 in 4 homes were underinsured, meaning the policies weren’t enough to cover the full cost to rebuild. He said most homeowners are unaware of how underinsured they are. 

“Given that it’s hard enough for consumers to understand their coverage limits, I have concerns that consumers will understand the connection between their wildfire risk and their premiums,” he said. 

While Cookson’s research focused on the insurance impacts after a devastating fire, he said mitigation is an important factor in not only lowering premiums, but also ensuring homes can keep coverage. He called HB 1182 a “common-sense” approach to doing just that, with the stipulation that mitigation work on an individual homeowner level will only go so far.

Mitigation ‘has to be meaningful’ 

The insurance industry, despite initial skepticism, ultimately grew more receptive to HB 1182, which it sees as an educational measure for homeowners. 

“I think in the long-term, it’s a step in the right direction, especially for insurance availability in our mountain areas,” said Carol Walker, executive director for the Rocky Mountain Insurance Association, “Unfortunately, we do still have marketplace challenges and heightened catastrophe and wildfire risk that are putting pressure on rates.”

Walker said the bill’s final version includes an important provision that holds homeowners’ mitigation efforts to a certain standard. 

HB 1182 defines “property-specific mitigation” as actions that are recognized by the Insurance Institute for Business and Home Safety’s Wildfire Prepared Home program. 

Insurers have used the program to offer discounts on premiums in at least two states, California and Oregon, through a certification process designed in tandem with the industry. The bill also states that a “similar mitigation program that includes a verification and certification process” must also be considered as property-specific mitigation. 

Walker, whose trade group represents insurance companies operating in Colorado, Wyoming, Utah, and New Mexico, said having mitigation work tied to an industry-recognized standard could open the door to insurers in Colorado creating a similar discount program. 

The bill also gives insurers the ability to directly lower premiums instead of changing their models to account for mitigation work — a provision the industry pushed for. 

“I think where we got with this signed bill — it will help people understand what mitigation the insurance companies look at and what matters,” she said. “That mitigation has to be meaningful, verifiable. It can’t just be cut the grass, remove a few trees; it has to be based on science-based standards.”

Lovgren, who oversees Eagle County’s wildfire mitigation program for homeowners, said many residents are already doing that work. 

The county’s Real Fire initiative, launched in 2016, offers free home assessments to residents who can receive a certificate from the county for completing certain mitigation steps. The county offers grants worth up to $1,000 for an individual and $7,500 for a whole neighborhood to help pay for the mitigation measures. 

He said around 1,300 properties have taken advantage of the free inspections since the program began, yet “we’ve still had certified properties lose insurance or had rates jacked up because of factors out of their control.” 

He blames “behind-the-scenes algorithmic decisions” that keep homeowners in the dark.

“There’s no return on investment on the millions of dollars that have been spent by the county, fire districts, (and) individual homeowners,” he said. 

One of the key aspects of HB 1182, which Eagle County supported, is the ability for homeowners to challenge their risk assessment through an appeals process, he said. 

By having clearly defined standards and more insight into insurers’ decisions, Lovgren hopes it will lead to an agreed-upon level of mitigation work that can guarantee rate reductions. If rates don’t go down, homeowners have an avenue to challenge why.

Not the end of Colorado’s insurance reform efforts

So, when might Colorado homeowners experience insurance premium relief?

HB 1182 doesn’t take effect until July 2026, a compromise from lawmakers to give insurers enough time to prepare for compliance. But Colorado Insurance Commissioner Mike Conway believes homeowners will start seeing benefits much sooner. 

During a recent town hall in Estes Park, Conway heard from a homeowner whose multi-unit townhome complex took steps to reduce its wildfire risk after hearing about the bill. Conway said the homeowner told him he’s already seen a significant reduction in premiums after the insurance company re-evaluated the property. 

“I think that’s a reflection of it already starting — the pressure from (HB) 1182,” Conway said. “Insurance companies know that the state is concerned about models that they’re using and want to ensure that the models they are using are accurately reflecting the mitigation work that is happening out there.” 

State leaders say HB 1182 isn’t the last of their policy ideas but part of an ongoing agenda to stabilize the homeowners insurance market. 

The state this spring launched its FAIR Plan, meant to serve as a last-resort insurance option for homeowners of properties worth up to $750,000 who can’t find coverage on the private market. Lawmakers are also planning to bring back a failed measure from this past legislative session, House Bill 1032.

The bill would have imposed a 1% fee on every homeowner’s insurance plan to create two new state funds aimed at addressing the leading drivers of insurance costs: wildfire and hail. It was killed, however, by Republicans and some Democrats who were uneasy about adding additional fees at a time when affordability issues dominate constituents’ concerns. 

Proponents of the bill argued the 1% fee would’ve been a small price to pay if it could have led to a more stable insurance market and lower premiums. 

One of the funds would have supported a grant program to help homeowners pay for improvements like hail-resistant roofs. 

Similar models have proven successful in states like Alabama, where a government-funded initiative has helped thousands of residents install fortified roofs certified by the Insurance Institute for Business and Home Safety to withstand hurricanes. A 2025 study analyzing insurance claims in the aftermath of Hurricane Sally in 2020 found that fortified homes had significantly fewer and less costly claims.

The bill’s other proposed fund would have been for a state-run reinsurance program to prevent rate spikes in the market following devastating wildfires.

Conway called the failure of HB 1302 “one of my largest regrets of my time as insurance commissioner.” He said the bill and the measures on wildfire risk were intended to work together as a legislative package. 

“We’re going to bring (HB 1302) back because affordability is the key,” he said. “You’ve got folks out there that are struggling mightily in order to keep their homes because their homeowners insurance costs have gone up so much.

“We’ve got to find a solution to that,” he said. “We can’t just sit back and say the market is going to solve this because the market isn’t solving it.”