BOULDER COUNTY, Colorado (CBS) – More than two weeks have passed since the tragic day of the Marshall Fire in Boulder County, and while those affected by the fire have many questions about the cost of rebuilding, many other homeowners are also taking a closer look at their insurance coverage. .
On Friday, we spoke with insurance expert Carole Walker, executive director of the Rocky Mountain Insurance Association. She says disasters like these are factored into future premiums. She says a single event will not have a direct impact; he enters a risk model. When we start to see events unfold more frequently, it adds up over time.
Waldo Canyon. Black Forest. High park. Cameron Peak: The list of Colorado’s most destructive wildfires is growing, with the Marshall Fire now leading the way.
“Unfortunately, we are in this pattern of increasing, volatile and catastrophic risk,” Walker said.
Walker told us the pattern is what leads to higher insurance costs for everyone.
“Unfortunately, we are in the perfect Colorado storm which increases the risk of wildfires,” Walker said. “It doesn’t matter where you live, that’s alarm bells for us. You don’t have to live in a mountain community in the Colorado foothills to consider yourself at risk of a wildfire.
Add extreme weather conditions such as the billion dollar hailstorm we experienced in 2017, and the risk increases. This is part of the reason why Colorado now has some of the fastest growing insurance rates in the country.
“That one event isn’t necessarily reflected in your net premium,” Walker said. “But it plays into it every time and unfortunately tops those lists that no one wants to be one when it comes to catastrophic risk.”
Walker says there are things that can be done to lower your risk for an insurer and better protect you.
“I think it’s a wake-up call for everyone that we have to be prepared,” Walker said. “We have to make sure we sail properly, making sure we are financially prepared.”
Walker explained that for those who work in the risk industry like insurers, they try to strike a balance. They need to know that they are collecting enough premiums to pay claims while trying to keep insurance affordable. She says it’s important to reassess your policy every year.
In Colorado, state law requires that insurance premium increases be justified and not unfair. Discriminatory rates are also heavily regulated by the Colorado Division of Insurance.