Colorado lawmakers have rejected a bill proposal aimed at bringing down homeowners insurance costs in the state. House Bill 1302, which passed in the House, was killed 6-2 during a Senate Finance Committee meeting on Tuesday. The bill proposed imposing a 1% fee on homeowners insurance premiums to fund initiatives tackling the state’s biggest cost drivers in the property insurance market: hail and wildfire.
The proposed fee would have supported two new enterprises within the Colorado Division of Insurance. The first was a grant program to encourage the adoption of hail-resistant roofs, while the second was a reinsurance program designed to reduce insurers’ risk related to wildfires. However, the bill’s opponents argued that imposing additional fees on homeowners would be difficult to justify, despite the potential long-term benefits.
Key Points of the Bill
- Imposed a 1% fee on homeowners insurance premiums
- Created a grant program for hail-resistant roofs
- Established a reinsurance program for wildfire risk
- Aimed to stabilize Colorado’s volatile homeowners insurance market
Sen. Kyle Mullica, an Adams County Democrat who voted against the bill, expressed concerns about explaining the need for increasing costs to constituents before potentially lowering them. “That’s a really tough thing to try to explain to your constituents that we have to increase their cost before we can lower them,” Mullica said. He emphasized his commitment to working with legislators and the industry to address the rising costs of homeowners insurance and ensure adequate insurance providers in the state.
House Speaker Julie McCluskie, a Dillon Democrat and co-sponsor of the bill, expressed disappointment at the bill’s failure but remained committed to finding statewide solutions to lower insurance costs. “While I am disappointed HB25-1302 didn’t make it across the finish line this year, I am committed to working toward statewide solutions to lowering insurance costs for Coloradans,” McCluskie said in a statement.
The rejection of this bill marks the second insurance-related proposal to be axed in the current legislative session. Previously, on April 29, the Senate Finance Committee voted 6-2 to kill House Bill 1303, a measure aimed at creating a fund for road improvements by imposing a fee on car insurance policies.
According to a 2023 report by the Colorado Division of Insurance, the average homeowner premium in Colorado increased by nearly 52% between January 2019 and October 2022. The annual increase accelerated from nearly 7% in 2020 to an average of nearly 15% in 2022, making Colorado’s rate increase “measurably higher” than the national average.
Related Background
- Average homeowner premium in Colorado increased by 52% from 2019 to 2022
- Annual premium increase accelerated to 15% in 2022
- Colorado’s rate increase was higher than the national average
This was not the first effort by Colorado Democrats to tackle rising homeowners insurance costs. In 2023, legislators created the Fair Access to Insurance Requirements Plan (FAIR Plan), a last-resort insurance product for homeowners denied coverage due to their location. The plan was launched for homeowners and small businesses in April 2024. Additionally, a bill was passed in 2024 to study property insurance market conditions, particularly for HOAs, condos, and lodges.
