Revolutionizing · Modernizing · Simplifying
Revolutionizing · Modernizing · Simplifying
Fifty-one. That is how many Colorado homeowners bought into the state's insurance-of-last-resort plan in its first few months, according to the Colorado Roofing Association. Not 5,100. Not 510. Fifty-one, statewide, as of September 2025.
And here is the part that should stop you cold. This is a state where Front Range homeowners are getting dropped and non-renewed over hail and wildfire risk on the regular. The safety net exists. Almost nobody is using it. So what happened?
Back up to May 12, 2023. Governor Jared Polis signs HB23-1288 into law, and that bill creates the Colorado FAIR Plan. FAIR stands for Fair Access to Insurance Requirements, which is a mouthful, but the idea is simple. If the standard market will not insure your house, this is supposed to catch you.
It is not a taxpayer thing, by the way. The FAIR Plan is a stand-alone, not-for-profit outfit funded by assessments on the admitted insurance carriers themselves. So the companies writing policies in Colorado pay in to keep the backstop running.
Residential homeowner policies became available April 10, 2025. Commercial property followed on June 17, 2025. So it is new. Brand new. And that is part of the story here, because the FAIR Plan's own roadmap calls 2025 and 2026 a "build-out" phase. The actual market-stability work? That is not even scheduled until Phase 2, which runs 2027 to 2028. Translation: the thing is still under construction while people are getting dropped right now.
Here is the piece most homeowners do not realize until it is too late. The FAIR Plan insures the actual cash value of your home. Not the full cost to rebuild it. Not replacement.
Let that sink in for a second. Actual cash value means depreciated value. So if your house burns to the foundation, the FAIR Plan is not writing you a check to build the same house back at today's lumber and labor prices. It pays what the depreciated structure was worth. In a state where rebuild costs have gone straight up, that gap can be brutal, and it is the reason the plan flat out tells people it is not meant to replace standard insurance. Right there on ColoradoFAIRPlan.com, the guidance says exhaust your standard options first. Always.
That is not marketing. That is an insurer telling you their own product is the last resort, not the good deal.
The barriers are real, and they stack up fast. To even qualify, you have to prove your property is considered uninsurable by the standard market. Not just expensive. Uninsurable. And you need to show three declinations. Three companies telling you no, in writing. Then you have to apply through a licensed, registered agent. You cannot just click a button on a website and get covered.
So picture the homeowner this is built for. Somebody up in the foothills, wildfire country, or a family on the plains who has filed one too many hail claims and watched their carrier walk. They are already frustrated. Now the fix requires three rejections and a limited policy that only pays cash value. I mean, you can see why the number is 51.
None of this is happening in a vacuum. The stress in Colorado's insurance market is measurable, and the number is ugly. In 2023, property owners here paid $4.58 billion in premiums. That same year, insurers faced $4.81 billion in claim payouts. That is a 115 percent loss ratio, per Bankrate. Roughly
You do not run a business that way for long. So carriers do what carriers do. They tighten up, they raise rates, they stop renewing the risky stuff. And the risky stuff, in Colorado, is a whole lot of houses.
The Division of Insurance, which sits inside DORA, is not sitting still. They championed HB25-1182, signed in 2025 and taking effect in 2026. That one is actually interesting. It forces insurers to factor property-level and community-level mitigation into their wildfire risk models. So if you cleared your defensible space, if your neighborhood did the work, that is supposed to count. It also requires insurers to tell policyholders their risk score and gives you a right to appeal it. Knowing your number, and being able to fight it, is new.
Then on June 4, 2026, the DOI announced more action, including SB26-155, aimed at pulling homeowners rates down and widening access across the state. And they held a virtual town hall on wildfire insurance on Wednesday, September 16, 2026, at 3 p.m. If you own in a risk zone, those town halls are worth your time. This is exactly the stuff that gets decided while everyone is looking the other way.
Here is the honest read. If you are shopping a home in the foothills or anywhere hail hammers every summer, insurability is now part of the deal, right alongside price and inspection. A house you cannot affordably insure is a house that is harder to finance and harder to resell. We watch this play out with buyers constantly.
The FAIR Plan exists. Good. But 51 sign-ups tells you it is a last-ditch parachute, not a solution, and it only pays cash value when it opens. Exhaust the standard market first. Do your mitigation, because in 2026 it finally counts on paper. And know your risk score before your carrier uses it against you.