Files247 After Washington state (18.1%) and Arkansas (18.5%), that was the third-largest annual rise.
Annual premiums in Colorado increased by $1593 from an average of $1,355 in May of last year.
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After Minnesota, this state’s premium was the second-highest of any in the research.
“Rate hikes in Colorado are more than twice as high as inflation. Pat Howard, a certified property and casualty insurance specialist at Policygenius in New York City, described the jump as being enormous.
As a major factor in premium inflation, insurers have pointed to greater claims as a result of more destructive hailstorms and wildfires. For instance, the Marshall fire, which occurred in Boulder County on December 30, damaged 1,084 properties valued at more than $500 million, much above the average fire season.
Files247 More catastrophic events are a contributing cause to why rates are rising so dramatically in Colorado and other states, according to Howard, as insurers prefer to spread the expense of claim payouts over a larger area. However, it is still too early to adjust the premium basis for the Marshall fire. The “elephant in the room,” as Howard refers to replacement prices, has recently become a significant factor.
Since the lifting of the lockdown orders in 2020, home values in Colorado have increased significantly. According to the S&P Case-Shiller Home Price indexes as of May, they were increasing in metro Denver by more than 23% annually. The costs to replace a property, however, are what insurers consider more carefully than its market value.
Files247 Since the epidemic, costs for building supplies and labour have increased due to supply-chain issues and a lack of workers.