Victor Lopez, a Gunbarrel resident, thought he had secured an affordable future when he bought his home with a low mortgage rate in 2018. But his home insurance, which started at $1,000 a year, has skyrocketed to $2,500.
“I’m not sure at what point it’s going to plateau,” Lopez said. “If these increases continue, I’m not going to be able to afford my house anymore.”
Lopez tried to find lower rates from other insurance companies, only to discover they were even higher — some nearing $4,000 a year.
“They’re all increasing their rates at a crazy pace,” said Lopez, a computer engineer who until recently lived with his partner and son. “My salary is not increasing at that rate.”
Lopez is not alone in waking up to a new reality in Boulder. Boulder County’s mountain communities have struggled to find insurance due to the flammable landscape surrounding their homes. As wildfires become a year-round threat, these insurance issues are no longer confined to the mountain communities. Climate change-fueled disasters are driving up homeowners insurance costs in cities and towns nationwide, with Colorado among the hardest-hit states, The New York Times recently reported.
“Insurance companies are not wanting to take on that risk anymore,” Sara Wright, an agency owner for Farmers Insurance in Boulder, told Boulder Reporting Lab.
Wright explained one factor driving up Boulder insurance prices is the high fire risk of certain zip codes. Insurance companies use “fire line scores” to assess the risk of a given area based on factors like flammable vegetation and water access for firefighters. Boulder’s 80302 zip code, while not in Lopez’s neighborhood, is adjacent and has recently been deemed very high risk.
The 80302 area includes Gold Hill and Salina in the Foothills, but also the Chautauqua neighborhood along with much of Mapleton Hill and University Hill. Wright said the fire risk in that zip code is causing insurers to pull back — not only from mountain homeowners but also from those in Boulder neighborhoods.
Wright explained that Farmers initially underwrote homes dropped by other insurance companies. However, next year, Farmers will not renew policies in mountainous areas, including the 80302 zip code, which it considers a mountainous area.
While some homes will lose coverage, many will still be able to obtain insurance, but the cost is ballooning, at least in part, to cover potential losses from mountain or other high-risk properties. Boulder as a whole is considered above-average risk due to its proximity to the Foothills.
Robyn Wille lives north of Baseline on Cherryvale in unincorporated Boulder County. Her home insurance, with American Family, is now $7,900 — almost $3,000 more than it was a year ago.
Wille recently considered buying a home a mile and a half farther east on South Boulder Road. She called her insurance agent to find out what a policy on the new home would cost and was quoted a rate $3,000 less than for her current home, despite the new house being much larger. The extra distance from the flammable Foothills seemed to make a difference in the insurer’s eyes. “It’s ridiculous,” she said.
Her agent also told her that American Family is not writing new policies or renewing policies in mountain communities. “He said, ‘If you’re halfway thinking about moving into the Foothills, don’t.’”
Don Dulchinos has lived in the Dakota Ridge neighborhood in Boulder for 30 years. In 2021, his homeowners insurance was $1,800 a year. As of June this year, it’s risen to $2,900 with Liberty Mutual. Despite shopping around for other insurers, he’s had no luck. Dulchinos points out that he lives just a few blocks from the Foothills, and in his 30 years there, two fires have burned right up to the neighborhood’s edge.
“We just got lucky,” he said, noting that the Marshall Fire opened many people’s eyes to what could happen when wind collaborates with a flammable landscape.
“I look at California and there are whole swaths where you can’t get insurance,” he said. “I’d hate to think that’s our future, but it could be.”
Mitigation efforts could ease the strain
While advances in wildfire resilience science and insurance modeling will improve risk assessment in the future, for now, insurance companies are painting with a broad brush, said Janet Ruiz, a director of strategic communication for the Insurance Information Institute, an industry-funded consumer information organization.
“We are in a challenging time right now,” she said.
Ruiz noted that Colorado’s insurers have done a better job of setting premiums that match the real climate risks of insuring homes. Unlike some states with artificially low rates, Colorado’s premiums are more accurately aligned with real dangers, ensuring insurers can cover claims. “It’s a favorable place as far as people working together and looking at the big picture,” she said.
While setting premiums based on real risks means higher prices in much of Boulder, mitigation efforts could help lower costs in the future.
Ruiz said the insurance industry is increasingly focused on mitigation, with homeowners who reduce wildfire risks around their properties likely to see lower rates. The industry is moving from a mindset of “prepare and recover” to one of “predict and prevent.”
“There are a lot of mitigation efforts being taken by communities and by individuals, and that is really going to be key moving forward,” Ruiz said.
Ruiz praised Boulder’s mitigation initiatives, like the Wildfire Partners Program, which helps homeowners understand their wildfire risks and is highly regarded in the industry.
Despite mitigation efforts, some homes will still be deemed too risky for insurers. For those, the state’s Fair Access to Insurance Requirements Plan, established last year, could begin offering coverage as early as next year. The plan provides insurance for homeowners and businesses who can’t secure coverage, but its maximum is $750,000 — well below Boulder’s nearly $1 million average home price. Others may turn to surplus lines insurance, which isn’t regulated by the state and can charge exorbitant rates.
While most will be able to find homeowners insurance, rising costs could push out those already struggling to afford living here. To offset his increases, Lopez has rented out his basement and had a roommate for a time but is now looking for another. Long-term, he’s considering renting out his entire house and moving to a cheaper apartment — or selling it outright. But with Boulder’s rental costs also rising, this is not a fail-safe option.
“Even apartments in Boulder are really expensive, and every year they are increasing more and more,” Lopez said. “I am very worried that even after selling my house, I’m going to move to a smaller place to pay almost the same as I am paying right now. That is the nightmare I have.”
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