New Homeowners Insurance Protections and Transparency Rights Under HB25-1182 Take Effect This Fall
Check for discounts for home wildfire mitigation efforts
DENVER – The Colorado Division of Insurance (DOI), part of the Department of Regulatory Agencies (DORA), wants Colorado homeowners to know their new rights regarding insurance companies’ use of wildfire risk assessment tools used in underwriting and pricing. These new requirements established by HB25-1182, Risk Model Use in Property Insurance, take effect in October and apply to admitted insurers and the Colorado FAIR Plan; they do not apply to non-admitted or surplus lines insurers.
Under the legislation, if an insurer uses wildfire risk scores in their rating or underwriting, they are required to consider qualified, science-based mitigation actions performed by homeowners and communities. Qualified mitigation efforts have a verification and certification process, such as those designated by the Insurance Institute for Business and Home Safety (IBHS). Policyholders are encouraged to contact their insurers to find out what property-level and community-level risk reduction standards they recognize.
Insurers and the FAIR Plan will issue a notice to policyholders and applicants explaining the wildfire risk score assigned to the property and the mitigation actions that may improve the risk score or result in premium discounts. Beginning October 1, 2026, the disclosure notices will be sent to applicants at the time of application, or to existing policyholders at policy renewal.
“Coloradans have stepped up to protect our state and their properties from wildfire with mitigation efforts. That work needs to be recognized by insurance companies,” said Colorado Insurance Commissioner Michael Conway. “This law requires insurers to recognize the work homeowners complete to protect their homes and communities, and to be open with homeowners about how wildfire mitigation can lead to potential savings.”
What the New Law Means for You
The law provides more transparency to homeowners so they understand how insurers are assessing wildfire risk. It provides homeowners with an ability to appeal their wildfire risk scores, and gives homeowners an understanding of what mitigation actions may provide discounts and the impact mitigation actions have on risk scores. If an insurer uses a wildfire risk model, catastrophe model, or scoring method to price, underwrite, surcharge, or non-renew a policy, they must now follow certain consumer protection requirements:
- Credits and Discounts for Mitigation
If an insurer is using models or risk scoring to make premium decisions, they must include property-specific mitigation and community-level mitigation into their pricing models. Insurers that do not consider mitigation actions in their models must provide a discount to policyholders who demonstrate that qualified mitigation work has been done.
- Clear, Plain-Language Disclosures
Insurers must provide a written notice to applicants and renewing policyholders. This notice cannot be hidden in fine print and must include:
- Your property's specific Wildfire Risk Score or classification.
- A plain-language explanation of how that score was calculated.
- The full range of possible scores, showing where your property falls on that spectrum.
- A written explanation detailing the features of your property or surrounding area that influenced your score.
- The impact mitigation has on your score
- A notice of your right to appeal a risk score, risk classification or premium discount.
- Strict Timelines for Insurance Companies
- For new applicants: Insurers must deliver your wildfire risk score and explanation within 15 days of receiving your completed application.
- For existing policyholders: Insurers must deliver your wildfire risk score and explanation with your renewal offer or, if being nonrenewed, with your nonrenewal notice.
- For new applicants and existing policyholders: If you appeal your wildfire risk score with evidence of property-level or community-level mitigation, the insurer and the FAIR Plan must review the evidence and, if applicable, update the risk score within 30 days.
- You have the right to appeal an inaccurate score. Once you submit a formal appeal with evidence of your mitigation work, the insurer must acknowledge receipt of your appeal within 10 calendar days. The company must review your evidence and provide a final written reconsideration decision within 30 calendar days
- If the appeal decision period extends past policy expiration, coverage must continue for at least 10 calendar days after you are notified of the decision.
- If an insurer denies your appeal, the Colorado Division of Insurance has the authority to request a copy of the appeal and the insurer’s reasoning to review it for compliance.
- Public Transparency of Discount Information
Insurers using wildfire risk models are required to clearly publish information on their public websites detailing potential premium adjustments, incentives, or discounts available to policyholders for property-specific and community-level mitigation actions, along with details on how to appeal a wildfire risk score or premium discount. Conversely, insurers that do not offer premium discounts must post on their public website that discounts are not available.
HB25-1182: Risk Model Use in Property Insurance In Action
Wildfire mitigation can make homes more insurable and homeowners insurance more affordable as insurers incorporate wildfire mitigation into their pricing and underwriting across Colorado. In particular, CSAA General Insurance Company and State Farm are expanding where they will write policies if consumers meet certain eligibility requirements, including wildfire mitigation. For example, a homeowner who attains the IBHS Wildfire Prepared Home Enhanced or Essential designation may be eligible for a 15% discount on the wildfire portion of their premium if they meet underwriting requirements with CSAA. They will also guarantee wildfire eligibility, provided the customer is Wildfire Prepared Home Enhanced and maintains a companion auto policy and meets all other eligibility requirements. For State Farm, properties even in high wildfire risk areas have the potential to be insured if they meet eligibility requirements including attaining the IBHS Wildfire Prepared Home designation. Other insurers are also offering premium discounts for wildfire mitigation activities in the areas of Colorado where they offer policies.
With these new incentives and discounts in place, the DOI encourages homeowners to shop around and work with your agent to find the coverage that’s the best fit for you. Be sure to consider coverage as well as cost as you make your decisions.
Action Items for Consumers
Starting in October, Colorado consumers can take proactive steps to maximize their potential savings and protections, including:
- Ask For Your Notice: When applying for or renewing a policy, look closely for the mandatory Wildfire Risk Notice. If you do not receive it, contact your agent or insurer immediately.
- Check Your Insurer’s Website: Visit your insurer’s website to look up their newly mandated mitigation discount disclosures and instructions for appealing your risk score or discounts.
- Shop Around: While HB25-1182 guarantees transparency, it is still important to compare insurers. Consulting with an insurance agent and comparing quotes from multiple insurers remains a powerful tool to find affordable coverage.
Questions or Complaints?
If your insurer fails to provide your wildfire risk score notice within the required timeline, refuses to review your mitigation evidence, or denies a discount without a valid written explanation, please file a complaint with the Division of Insurance.
Consumers can reach out to the DOI Consumer Services Team for assistance at 303-894-7490, via email at DORA_Insurance@state.co.us, or by visiting doi.colorado.gov to file an online complaint.
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