Natural hazards and home insurance in Colorado

Which hazards matter in Colorado and in Denver

Two sources name the hazards behind Colorado’s insurance pressure. The legislature’s findings in HB 23-1288 cite three of the largest wildfires in the state’s history in the preceding five years and the 2021 Marshall Fire, which “resulted in the loss of over one thousand homes and commercial properties.” The Colorado FAIR Plan describes the properties it insures as high-risk because of “their location, prior claims, or exposure to natural hazards such as wildfires or hail.”

For Denver, the city’s 2022 Hazard Mitigation Plan analyzes 21 hazards, including flooding, severe thunderstorm, tornado, wildland fire, expansive soils and subsidence, dam inundation and earthquake. We did not read the plan’s risk ratings, so this page does not rank them. FEMA’s records show five major disaster declarations that covered Denver County: tornadoes, storms and flooding (1965), heavy rains, snowmelt and flooding (1973), wildfires (2002), flooding and mudslides (2013) and flooding, tornadoes, landslides and mudslides (2015). Check your own address rather than relying on the city or county average.

Flood insurance and flood zones

Flood is the gap in most policies. FEMA’s FloodSmart states that most homeowners and renters policies do not cover flood damage and that a homeowners policy will not satisfy a mortgage’s flood requirement.

The 30-day wait does not apply if you buy the policy while making, increasing, extending or renewing a mortgage. There is a one-day wait if a flood is caused or worsened by a wildfire on federal land and you buy within 60 days of the fire’s containment date. That exception matters in a state with large fires.

Denver’s own flood page adds local detail. Flood insurance is required by law for a primary building with federally backed funding in a flood map zone with an “A” designation, and optional in Zone X and Zone D, though the city recommends it for everyone in flood-prone areas. Denver also maps an Urban Flood Risk Area where stormwater can pool; the city says this is separate from FEMA’s high-risk zones. Flood policies have limited coverage in basements. Denver participates in the NFIP Community Rating System at Class 6, a 20% discount for policyholders effective April 1, 2023.

Wildfire and hail coverage

When standard insurers decline a property because of wildfire or hail exposure, the Colorado FAIR Plan is the fallback. We could not read the Colorado Division of Insurance’s own consumer pages (its website blocked our requests), so this page does not describe standard-market rate trends or non-renewals.

Colorado law also affects how you protect a home. Under C.R.S. § 38-33.3-106.5, as printed in the 2024 edition, a homeowners association may not prohibit “fire-hardened building materials” on a unit owner’s property, with limited exceptions for fencing. The FAIR Plan points owners to resources on roof standards and wildfire-resistant homes, and says a well-mitigated property is “the best path away from the Colorado FAIR Plan.”

The insurer of last resort: Colorado FAIR Plan

HB 23-1288 created the Fair Access to Insurance Requirements Plan Association, a nonprofit unincorporated public entity that every admitted property insurer must join. Insurers share its losses through assessments, not public money.

The statute requires FAIR Plan rates to be actuarially sound and subject to the state’s rate filing and review rules. The FAIR Plan uses a wildfire risk model that scores each insured property from 1 to 10 at community and property level; you may request a review of your score. It does not give discounts for individual mitigation actions. Its toll-free number is (833) 554-5425.

Because the FAIR Plan pays actual cash value, a total loss may not fund a rebuild. The FAIR Plan itself says supplemental difference-in-conditions coverage may be available and that surplus lines insurers are another option. Ask your agent to compare both before you accept a FAIR Plan quote.

Hazard disclosure when you buy

The disclosure statutes in Title 38, article 35.7 (2024 edition) cover special taxing districts, common interest communities, methamphetamine labs, the source of drinking water, transportation projects and oil and gas activity, among other items. We found no section that requires a seller to disclose a flood zone or wildfire risk. Many sellers use the real estate commission’s seller’s property disclosure form; we could not read it, so check what it asks. Our seller disclosure guide covers the process. Ask for the property’s insurance history, and get quotes before you waive your inspection and financing deadlines. See also our guides to homeowners insurance and flood insurance, and our page on buying a home in Denver.