Insurance commissioner unveils bill to reduce homeowners' insurance costs at Durango stop

When a homeowner in Southwest Colorado types their address into an insurance company's quote generator, it's not uncommon to receive a notification that the insurer will not write a policy for that address.

That response, or the rate the generator produces, is based, in part, on modeling employed by the insurance companies to try and determine a home's exposure to wildfire risk.

"Wildfire risk models are the bane of my existence right now – one of the banes of my existence right now," Colorado Insurance Commissioner Michael Conway told about 40 people at a listening session last week in Durango. "I hate them."

The models that insurers use are black boxes, he said Oct. 9. The outputs are imprecise and the methods used to determine risk are at times inconsistent, and always unknown.

Conway wants to change all that.

His office is proposing legislation next year that will force insurers to use models that meaningfully incorporate parcel and landscape-scale mitigation, enable homeowners to appeal their wildfire risk score and demand the insurers simply explain the discounts available to homeowners who perform mitigation work.

The bill would be one of several measures Conway wants to pursue with the intention of reducing the cost and increasing the availability of homeowner's insurance. Insurers have stopped writing policies across large swathes of Colorado, including the southwest in response to increasing losses primarily driven by hail damage. High interest rates also meant that reinsurers – the insurers that underwrite insurance carriers – could find strong returns elsewhere without taking on as much risk.

The transparency bill, as Conway is calling it, will not be formally titled or introduced until early 2025 and will be sponsored by Reps. Brianna Titone and Kyle Brown, both Front Range Democrats.

When Conway said the bill had sponsors in the House but not the Senate, all eyes turned to State Sen. Cleave Simpson, who originally asked Conway to come to Durango. In an interview following the event, Simpson said he would have to see the proposed legislation before signing up as a sponsor. At first blush, it sounded like something he could support, he said.

Ignacio Mayor Clark Craig, who is running to represent House District 59, indicated a similar warmth to the proposal.

"I'm very interested," he said.

Although models have the capability to incorporate mitigation efforts, as the transparency bill would mandate, most don't, according to the commissioner.

"They're just not sophisticated," Conway said.

By way of example, Durango Fire Protection District Chief Randy Black noted that the department was repeatedly denied insurance for its new firehouse by companies who cited the wildfire risk. The construction site of the new building sits adjacent to the existing station and is buffered by parking lots on two sides, and a river and a highway on the others.

One of the biggest issues with the models is that they take poor, if any, consideration of mitigation efforts. Homeowners who spend thousands of dollars to remove flammable organic material from the area near their home, at the urging of experts and local officials, are not rewarded for lowering the likelihood that their home is incinerated with corresponding lower premiums.

"That's unacceptable," Conway said. "If we want to encourage people, if we want to encourage communities to mitigate, people have to get the return on their investment for that."

La Plata County Commissioner Marsha Porter-Norton applauded Conway's efforts and offered to try and drum up support from the county's lobbying group. The county has put extensive time and effort into making mitigation accessible.

"To know all of that energy is going in, and people still can't get insurance is just so maddening," she said.

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