The new year began with devastation in Los Angeles as the Palisades and Eaton Fires tore through communities, destroying over 10,000 structures and forcing more than 180,000 people to evacuate. These wildfires, some of the most destructive in California’s history, have caused an estimated $50–$57 billion in damages.  For many families, the flames left behind not only physical loss but financial uncertainty as the crisis in California’s homeowners insurance market continues to grow.

High winds and dry conditions have made it nearly impossible to contain the fires, spreading destruction to neighborhoods across Los Angeles, including Hollywood Hills and Malibu. While rebuilding will be a long process, the financial impact extends beyond individual families, as insurers face mounting pressure to navigate wildfire risks.

How Wildfires Are Reshaping Homeowners Insurance in California

California’s homeowners insurance market was already strained, but these devastating wildfires are pushing it to its breaking point. Homeowners in high-risk areas are facing challenges that include:

• Soaring Premiums: Insurance costs have climbed by as much as 300–400% in some wildfire-prone areas. Homeowners who used to pay $1,500 annually now face bills of $5,000 or more.
• Non-Renewals: Insurers are pulling back in areas deemed too risky. In 2022 alone, over 300,000 homeowners received non-renewal notices.
• Limited Options: Many homeowners are left with the California FAIR Plan, which provides basic fire coverage but at a higher cost and without the comprehensive protection offered by traditional insurers.

Even major insurance companies like State Farm and Farmers Insurance have scaled back their operations in wildfire-prone regions, citing the financial strain caused by frequent and severe fires.

Fire Zone Coverage in Colorado: A Growing Concern

While California remains the epicenter of the wildfire insurance crisis, Colorado is not far behind. The state has seen increasingly destructive fires, such as the Marshall Fire in 2021, which destroyed over 1,000 homes and caused nearly $2 billion in damages.

Colorado’s wildfire seasons are growing longer and more intense, and insurance companies are beginning to adapt their policies in ways that mirror the challenges seen in California.

Key Issues for Colorado Homeowners:

• Fire Zone Coverage: Homeowners in high-risk areas are finding that standard policies often exclude wildfire damage unless specific fire zone endorsements are added. Fire zone coverage typically comes with higher premiums and stricter requirements for mitigation measures, such as clearing defensible space and using fire-resistant building materials.
• Premium Increases: Colorado homeowners have experienced premium hikes of 20–30% annually in areas at higher wildfire risk, making insurance less affordable for many residents.
• Policy Non-Renewals: Insurers in Colorado are starting to follow California’s trend of withdrawing from wildfire-prone regions, forcing homeowners to turn to the Colorado FAIR Plan. Like its California counterpart, this plan offers only basic coverage and is often more expensive.
• Strict Mitigation Standards: Insurers now require homeowners to take significant fire prevention measures to secure coverage, including creating defensible spaces around properties and installing fire-resistant roofing, windows, and siding.

How Colorado Homeowners Can Protect Their Homes and Coverage

As wildfires continue to reshape Colorado’s insurance market, it’s crucial for homeowners to be proactive. Taking the right steps can not only safeguard your property but also help secure more affordable and comprehensive insurance coverage. With Colorado’s wildfire seasons becoming longer and more intense, fire zone mitigation has become an essential part of homeownership in the state. Here are some strategies to consider:

Check Your Risk Level

Use local fire zone maps and tools provided by Colorado state or county fire departments to determine if your home is located in a high-risk wildfire area. Understanding your home’s wildfire risk level can guide your mitigation efforts and help you make informed decisions about insurance coverage. The Colorado State Forest Service offers valuable resources for homeowners, including detailed wildfire risk assessments for neighborhoods across the state.

Invest in Wildfire Mitigation

Fire zone mitigation is critical for reducing the risk of wildfire damage and can also make you eligible for insurance discounts. Key mitigation steps include:

• Create Defensible Space: Clear flammable vegetation, brush, and debris within at least 100 feet of your home. Maintain a well-watered lawn and trim trees to create a buffer zone.
• Install Fire-Resistant Materials: Upgrade your home with fire-resistant roofing, siding, windows, and doors to minimize vulnerability. Consider using Class A-rated materials for roofing, which are highly resistant to fire.
• Regular Maintenance: Clean gutters and roofs regularly to remove dry leaves and other debris that could ignite during a wildfire. Inspect your property for potential fire hazards annually.
• Fire-Resistant Landscaping: Use gravel, stone, or other non-flammable materials close to your home. Plant fire-resistant vegetation, such as succulents, and avoid highly flammable plants like junipers and pines near structures.

Colorado’s Wildfire Partners program offers guidance and financial assistance to homeowners implementing these mitigation strategies, making it easier to comply with insurer requirements.

Explore Insurance Options

Work with Colorado-based insurance brokers who understand the unique risks in fire zones. They can help you find policies that include fire zone endorsements and provide access to discounts for mitigation measures. Be sure to ask about coverage options specifically designed for wildfire-prone areas, as standard policies may exclude fire damage without specific endorsements.

Bundle Policies

Combining home and auto insurance with the same provider can lead to cost savings and simplify managing your coverage. Many insurers offer discounts for bundled policies, which can help offset rising premiums in high-risk areas.

Keep Your Policy Up-to-Date

Regularly review your homeowners insurance policy to ensure it reflects the current replacement cost of your home and includes coverage for wildfire-related risks. Notify your insurer about any mitigation measures you’ve implemented, as these updates may qualify you for premium reductions.

Prepare an Emergency Plan

Develop a family evacuation plan to ensure everyone knows what to do in the event of a wildfire. Keep important documents, such as insurance policies, home inventory lists, and vital records, in a fireproof safe or secure digital storage. Being prepared can save time and reduce stress during an emergency.

By focusing on mitigation efforts and staying informed about fire zone risks, Colorado homeowners can significantly reduce the likelihood of wildfire damage. Proactively working with local insurance brokers and investing in fire-resistant measures not only protects your home but also improves your chances of securing comprehensive and affordable coverage in this challenging insurance landscape.

The Path Forward

The wildfire crisis is forcing communities and insurers to rethink how to manage risk. For homeowners, the best approach is to stay informed, take steps to protect their properties, and seek expert advice on coverage options.

In Colorado, the increasing frequency of destructive fires highlights the need for proactive measures. Homeowners must invest in wildfire mitigation, explore fire zone coverage options, and stay ahead of changes in the insurance market. Similarly, California’s experience demonstrates how critical it is to adapt to a rapidly evolving landscape. By prioritizing risk reduction and engaging with local insurance brokers, homeowners in both states can safeguard their properties and secure peace of mind. As wildfires continue to reshape communities across the West, collaboration between residents, insurers, and policymakers will be essential to building a more resilient future.