Colorado lawmakers have passed a plan to lower homeowners insurance premiums by subsidising hail-resistant roofs. Senate Bill 155 cleared the Capitol after a broader insurance relief proposal failed last year. The bill was a top priority for House Speaker Julie McCluskie, D-Dillon.
McCluskie tried last session to pass a measure funding programs tied to the cost effects of hail and wildfire on home insurance.
This year’s version takes a narrower approach and focuses mainly on hail damage, which state insurance data identifies as a major driver of rising premiums.
SB155 would impose a 0.5% fee on every homeowners insurance plan written in Colorado. The money would go into a new grant program helping homeowners pay for hail-resistant roof installation. Lawmakers expect the fee to raise up to $100 mn during the program’s first five years.
McCluskie said during a May 11 House floor debate that the bill should provide relief for homeowners and help stabilise the market. She said the measure promotes a better way to keep property insurance rates from rising further.
Colorado home insurance premiums have climbed sharply, with average premiums more than doubling between 2018 and 2023, according to a Colorado State University report.
The same report ranked Colorado as the sixth-costliest U.S. state for homeowners insurance. Costs have hit mountain towns especially hard, with some local officials reporting premium increases of up to 1,000% in recent years.
Wildfire risk remains part of the pricing problem, but a recent Colorado Division of Insurance study found hail is the largest single driver of premium increases. The study found hail can account for 26% to 54% of premium costs, while wildfire accounted for 0.9% to 24.6%.
Homeowners across the state feel those costs, including in areas where hailstorms happen less often. Lawmakers expect roof mitigation work to lower risk across the pool and reduce premium pressure statewide.
This year’s bill does not fund wildfire measures in the same way last year’s proposal did. Lawmakers previously sought to create a reinsurance program to offset insurer losses from catastrophic fires.
SB155 instead orders a study into creating such a reinsurance program.
Lawmakers also changed the bill’s funding structure after last year’s defeat. The prior proposal relied on a fee tied to insurance plans, which drew objections from some Democrats.
Sen. Kyle Mullica, D-Thornton, voted last year to kill the measure. He argued the fee would be passed on to homeowners, undercutting the goal of lowering insurance costs. This year’s bill includes language barring insurers from passing the fee to policyholders as a surcharge.
Mullica said that change addressed his concern and became a lead sponsor of SB155 alongside McCluskie. Other lead sponsors included Sen. Janice Marchman, D-Loveland, and Rep. Kyle Brown, D-Louisville.
The Rocky Mountain Insurance Association also backed the bill. The trade group represents home insurers in Colorado, Wyoming, Utah, and New Mexico.
Carole Walker, the group’s executive director, said in April that insurers supported paying the fee because hail protection would reduce future liability.
Republicans opposed the bill and questioned whether insurers would still find ways to spread the new cost across policyholders. Rep. Anthony Hartsook, R-Parker, said businesses spread expenses across their operations, and the fee would become another cost distributed across all policyholders.
The bill passed both chambers along party lines. It cleared its final vote on May 13, the last day of the legislative session, and now goes to Gov. Jared Polis, who is expected to sign it.
