This story was produced as part of the Colorado Capitol News Alliance. It first appeared at coloradosun.com.
More than two dozen families are being covered by Colorado’s new property insurer of last resort, which was created by the legislature to protect homeowners who can’t find coverage on the private market.
The Fair Access to Insurance Requirements Plan, or FAIR Plan, began accepting applications from residential property owners April 10. Applications for commercial property owners are slated to open this week.
Legislation producing the FAIR Plan was passed by the General Assembly and signed by Gov. Jared Polis in 2023 in response to the growing number of homeowners who said private insurers wouldn’t cover their homes due to the growing threat of wildfire and severe weather, the result of a warming climate.
Home insurance is required for people who have a mortgage, which includes the vast majority of homeowners.
Lawmakers and Polis worried that Colorado’s housing market could collapse if enough homeowners couldn’t find coverage.
Kelly Campbell, who has worked for nearly three decades in the insurance industry, is executive director of the FAIR Plan. She said the plan should truly be a last-resort option for property owners because of its high cost and bare-bones coverage.
Those covered by the plan only get “actual value” coverage, as opposed to “full replacement” coverage. The former is much less generous.
“That’s the most critical and fundamental difference,” she said.
The FAIR Plan has a maximum coverage limit of $750,000 for residential properties and $2 million for commercial properties.
To qualify for the plan, property owners have to show that they’ve been rejected by three private insurers. People are not eligible for the plan if private insurers have offered to cover them but at a high price.
To sign up for coverage under the plan, property owners must work with an agent who is approved to apply for the FAIR Plan.
Campbell said because property owners must work with an approved insurance agent, the vast majority of applications have been approved because they met the FAIR Plan’s criteria.
Only been three applicants had been rejected through last week. All had properties that were either under construction or undergoing major renovations. The plan requires a home to be habitable before it can be covered.
The 31 properties currently covered by the plan are concentrated along the Interstate 25 corridor and west, Campbell said.
Colorado is one of dozens of states with a so-called FAIR plan.
Find more information on Colorado’s plan, visit coloradofairplan.com.
Colorado Capitol Alliance
This story was produced by the Capitol News Alliance, a collaboration between KUNC News, Colorado Public Radio, Rocky Mountain PBS, and The Colorado Sun, and shared with Rocky Mountain Community Radio and other news organizations across the state. Funding for the Alliance is provided in part by the Corporation for Public Broadcasting.
