The state of Colorado is taking steps to try to lower insurance premiums for residents working to mitigate wildfire risk on their properties.
According to early-June reporting from the Steamboat Pilot & Today, a daily newspaper publishing out of Steamboat Springs and Routt County in Colorado, state lawmakers recently passed House Bill 1182. Signed into law by Governor Jared Polis in May, the bill is intended to require insurance companies to be transparent about potential discounts related to wildfire risk and also mandates that the companies take mitigation efforts into consideration when assessing a property to be insured.
The plan is that by requiring insurance companies to provide that kind of information, it will help to lower premiums on more protected housing. At the same time, lawmakers hope it will incentivize homeowners to strengthen their properties' resilience to wildfire-caused damage when possible.
"Homeowners need insurance at a reasonable cost, and they also have to have a clear knowledge base of what to do," resident Lisa Lewis told the local paper. "This (law) gives homeowners the incentive to do their part."
Colorado, like most of the American West, has seen its risk of wildfires increase in recent years, due in large part to a years-long drought driven by the overheating of our planet. Much of the grassland in the eastern part of the state and the forests in the western part of the state have become much drier, so wildfires are a more common occurrence.
Insurance premiums in the state have skyrocketed right along with fire risk. Lewis told the Steamboat Pilot & Today that companies were initially unwilling to consider any kind of wildfire mitigation techniques when setting premiums.
Now Carol Walker, executive director at the Rocky Mountain Insurance Association, says, "I think in the long-term, it's a step in the right direction, especially for insurance availability in our mountain areas."
Walker did go on to say that insurance companies "do still have marketplace challenges and heightened catastrophe and wildfire risk that are putting pressure on rates." While the residents may ultimately be the biggest bearers of those challenges, it's possible that community-level action could help.
The Steamboat Pilot & Today quoted from HB 1182 to explain that the bill also requires companies to take into consideration "community-level mitigation activities or designations, including forest treatment and other fuel reduction activities." Residents who come together to support such local efforts might reduce their premiums through that mechanism.
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