The Rocky Mountain Insurance Information Association (RMIIA) announced in a news release that Colorado homeowners face the nation's fourth-highest insurance premiums, averaging about $4,600 annually.
Homeowners in Colorado pay average annual insurance premiums of approximately $4,600, making it one of the most expensive states for homeowners insurance. According to Axios, premium rates in Colorado increased by nearly 58% between 2018 and 2023, a surge much higher than the national average. This significant rise is attributed to catastrophic wildfires, severe weather events, and increasing property values.
Tort costs include legal fees, settlements, and damages that insurers pay as a result of civil lawsuits and liability claims. The Economic Policy Institute reports that when tort costs increase, insurance companies typically respond by raising premiums to cover the greater financial risk. Higher tort costs are linked to higher insurance rates as insurers adjust pricing to reflect expected legal liabilities.
Actions by trial lawyers, such as increased legal advertising and third-party litigation funding, have contributed to the frequency and size of insurance claims. According to Reinsurance News, research from the Insurance Information Institute shows that these legal practices increase costs for insurers who then raise premiums for consumers to manage these expenses. These legal trends have become a significant driver of rising insurance costs in states like Colorado.
The RMIIA is a non-profit insurance communications organization representing property and casualty insurers in Colorado, New Mexico, Utah, and Wyoming. Its primary role is to provide consumers, the media, and safety partners with information to better understand auto, homeowners, and business insurance as well as loss prevention and safety tips.