Colorado lawmakers killed a bill proposal aimed at stabilizing the state’s volatile homeowners insurance market. 

House Bill 1302 would have imposed a new 1% fee on homeowners insurance premiums. The funding generated by the fees would have supported two new enterprises within the Colorado Division of Insurance to tackle the two biggest cost drivers in the state’s property insurance market: hail and wildfire. It would have created a grant program to incentivize hail-resistant roofs and a reinsurance program to reduce insurers’ risk around wildfires. 

After passing in the House, the bill was rejected 6-2 during Tuesday’s Senate Finance Committee meeting. Three Democrats and three Republicans voted to kill the bill.

While its opponents agreed it targeted a significant challenge for Coloradans, they disagreed with imposing fees to reduce premiums.

“That’s a really tough thing to try to explain to your constituents that we have to increase their cost before we can lower them,” said Sen. Kyle Mullica, an Adams County Democrat, who voted to kill the bill. “They don’t want to see us adding additional fees.” 

Mullica added that he was committed to working with the legislators and industry to reverse or slow the upward trajectory of homeowners insurance and ensure there are adequate providers in the state. 

House Speaker Julie McCluskie, a Dillon Democrat, co-sponsored the bill alongside Rep. Kyle Brown and Sens. Judy Amabile and Marc Snyder, all Front Range Democrats. 

“​​While I am disappointed HB25-1302 didn’t make it across the finish line this year, I am committed to working toward statewide solutions to lowering insurance costs for Coloradans,” McCluskie said in a statement to the Aspen Times. “Sometimes it takes a multi-year effort for great pieces of legislation to be signed into law. While this session wasn’t the time, I am happy that HB25-1302 sparked the conversation and laid the groundwork for future legislation.”

Amabile warned that legislators voting to kill the bill were “opting to do nothing about a runaway freight train that is going to hit all of us.” 

“What we were trying to do with this bill is get ahead of (rising disaster-related costs) because all signs indicate that we are not going to get out of this escalating cost of natural disasters and therefore, the same with our increases in premiums,” Snyder said. “It’s not a problem that’s just going to resolve itself. We might get a year or two of relief, but looking down the road, we’re going to have years like we’ve had in the past.”

According to a 2023 report commissioned by the Colorado Division of Insurance, the average homeowner premium in Colorado increased by nearly 52% between January 2019 and October 2022, with the annual increase accelerating. The average premium increase went from nearly 7% in 2020 to an average increase of nearly 15% in 2022, making the rate increase “measurably higher” in Colorado than the countrywide average, the report notes. 

This was the most recent effort from Colorado Democrats to tackle the rising cost of homeowners insurance. 

In 2023, legislators created the Fair Access to Insurance Requirements Plan, also known as the FAIR Plan, a last resort insurance product for homeowners who are denied coverage based on location. The plan launched for homeowners and small businesses in April. In 2024, a bill was passed to launch a study of property insurance, particularly on market conditions for HOAs, condos and lodges. 

Another enterprise failed

This was the second proposal to increase insurance fees that was voted down by the Senate Finance Committee in recent weeks. The committee voted 6-2 to kill House Bill 1303, a measure to create an enterprise fund for road improvements, on April 29. 

The bill proposed imposing a fee on car insurance policies to raise funds for road infrastructure projects aimed at reducing vehicle collisions with wildlife, pedestrians and cyclists. 

Western Slope Democrats Rep. Meghan Lukens and Sen. Dylan Roberts sponsored the bill alongside their Front Range colleagues Rep. Andrew Boesenecker and Sen. Faith Winter. 

In a statement to the Aspen Times, Lukens said the intent of the bill was to “save lives and decrease insurance costs.” 

“However, a tight budget year made it difficult to fund infrastructure needs, including wildlife crossings and safer roads,” Lukens said, adding that the legislators would continue work on “creative solutions” to meet the measure’s intent. 

At the hearing, Roberts said he was “saddened” that the bill lacked the support to move forward. 

“There’s not a lot of times when you get a proposal in front of you, at least in my experience here at the legislature, where you have proven ways to help our constituents to prevent them from being injured or killed,” Roberts said. “We know that vulnerable road user infrastructure works. We know that wildlife crossing infrastructure works.”

Roberts specifically cited the Colorado Highway 9 wildlife crossing project in his district as an example of the effectiveness. The project saw two wildlife overpasses, five wildlife underpasses, 29 wildlife guards, 61 escape ramps, and 10.3 miles of wildlife fencing lead to an over 90% reduction in wildlife-vehicle collisions along the 10.5 mile stretch. 

“We’re going to keep working on this,” Roberts said.