Colorado lawmakers this week rejected a proposal by Democratic Gov. Jared Polis to backstop the state’s property insurance market, sending the state back to the drawing board as it contends with rising premiums, canceled policies and a growing wildfire threat.
H.B. 1302 sought to create a state-operated reinsurance program for wildfires. Reinsurance functions as insurance for insurance companies, hedging against massive losses by paying out after disaster costs surpass a certain threshold.
To access the state’s reinsurance pool, the bill would have required insurers to offer policies in Colorado’s high-risk fire areas. It would have been financed with a half-percent fee on homeowners insurance — along with another half-percent fee for a hail damage program. Homeowners with “wildfire prepared” properties would have been exempt from the fee.
The measure encountered resistance in the Democratic-controlled state Senate after its April passage in the state House, where Speaker Julie McCluskie (D) had been a sponsor. The Senate Finance Committee on Tuesday voted down the measure 2-6, with three Democrats joining three Republicans, after lawmakers balked at adding more costs to homeownership.
