Colorado House Passes Bill to Increase Property Insurance Transparency
DENVER, CO – The Colorado House of Representatives has approved a bill designed to help residents reduce their property insurance expenses. The legislation mandates greater transparency in the wildfire mitigation risk models used by insurers, and how these models affect individual insurance policies.
House Bill 25-1182 (HB25-1182), sponsored by Representatives Brianna Titone and Kyle Brown, passed with a vote of 45-18.
“When Coloradans are properly informed about fire mitigation, they can be more strategic about the steps they take to protect their property from fire damage and correct any errors in their insurers’ records,” said Representative Brianna Titone, a Democrat representing Arvada. “Insurance companies are increasingly using wildfire risk scoring and models to determine policy coverage and pricing, but the lack of transparency has left property owners confused about the policy decisions their insurers make. This bill promotes transparency and accountability in property insurance so Coloradans can take effective mitigation efforts that help bring down their insurance costs.”
Representative Kyle Brown, a Democrat from Louisville, also spoke in support of the bill, stating, “Colorado Democrats’ fire mitigation laws help Coloradans protect their properties against wildfires, and this bill helps clarify how property owners can implement these strategies to drive down their insurance costs. This legislation helps provide transparency behind wildfire risk score calculations so Coloradans can take the action they need to save money and protect their property from wildfire damage.”
HB25-1182 introduces several requirements for insurance providers. Specifically, insurers will be required to provide a written notice to each policyholder at the time of application, renewal, or nonrenewal. This notice must include straightforward explanations of the wildfire risk score or how a property is classified, a range of possible risk scores, and the impact any mitigation efforts might have on the risk score or classification.
The bill also establishes an appeal process. Policyholders and applicants who believe their wildfire risk model score, wildfire risk classification, or applicable mitigation discount is inaccurate can appeal the decision. They must provide evidence of the mitigation efforts that they believe should be considered. The insurer will be required to acknowledge receipt of an appeal within ten days and respond with a reconsideration and decision within 30 calendar days. Furthermore, if an appeal is denied, the state’s Commissioner can request a copy of the appeal and the insurer’s response.
Finally, HB25-1182 mandates that insurers using parcel level and community-wide mitigation efforts in their models ensure the risk scores reflect the real resilience. Insurers that use these models must account for property-specific and community-level mitigation actions within their underwriting and pricing. If the insurer doesn’t incorporate these actions, they must offer discounts to policyholders who have implemented these actions at either the property or community level.
