What is Causing the Recent Increase in CO Home Insurance Rates?

Colorado Residents are seeing a rapid increase in their home insurance rates.  In our agency we are regularly seeing 30% -50% increases in one year. It’s a painful experience, but it also helps to know ‘why’. Below are some causes of the home insurance rate increases.

Ever Increasing Weather-Related Events in Severity and Frequency

As you know, our weather is changing. Regardless of the cause, the insurance carrier’s loss statistics and payouts prove this.  Across the country, payouts to repair or replace homes and autos have been skyrocketing for the past 10 years and the amounts paid out by insurance companies are more frequent and more costly

Increasing Costs to Repair/Replace Your Home

According to The National Association of Home Builders, building costs (labor and materials) have increased 36% in the past 2 years. This is mainly due to labor and material shortages. These shortages are in every industry across our economy.

Recent loss of 1,100 homes near Denver

Also due to the recent wildfire in Superior where 1,100 homes were lost and now in the process of rebuilding, these costs will be passed along to all policy holders in the State of Colorado for the next several years, at least while these homes are being rebuilt.

Automatic Increase in Coverage to Replace/Repair Your Home

Many of these lost homes were underinsured because the estimator software the carriers use to estimate the cost to replace your home have not kept up with these rising labor and material costs.

We are now seeing the carriers react to this issue by renewing home policies with much higher limits to replace your home (Coverage A on your renewal.)  This means may automatically be receiving more coverage, which will also increase the policy cost.

Two Easy Things You Can Do to Bring Down your Home Insurance Cost

1.  Try having the agent rerun your credit score. But make sure a lower score will not negatively affect the cost.  Some carriers will only apply a ‘better’ score. But some carriers will apply the new score regardless

2.  Increase your deductible – I tell my clients to carry the highest deductible you can afford to pay ‘at a moment’s notice’.  Statistics show over time, this will save money,

If you would like to discuss your and home insurance coverage and cost, please feel free to call our office at 303-960-5290 and speak with one of our licensed agents.  We will help evaluate your current home replacement coverage. 

Denver West Insurance Brokers is located in downtown Golden, Colorado. We have clients all over the state and serve the communities of Denver, Lakewood, Littleton, Morrison, Arvada, Wheat Ridge, Evergreen, Westminster

Note: Data and information provided on this site is for informational purposes only and should not be considered professional or legal advice. Denver West Insurance Brokers makes no representations as to accuracy, or validity of any information on this site and will not be liable for any errors, omissions, losses, injuries, or damages arising from its display or use.