Colorado lawmakers have proposed a groundbreaking reinsurance plan aimed at alleviating soaring home insurance premiums. Under House Bill 1302, utility companies would invest in bonds that would finance reinsurance purchases for home insurers, potentially lessening their liability for wildfire damages. With premiums rising by an average of 57.9% since 2018 due to extreme weather and inflation, supporters believe this is essential for retaining insurers in the state. If successful, this model could inspire similar efforts in other states facing high home insurance costs, like California.
If successful, the first-of-its-kind program could set the stage for other states, like California, that are struggling with home insurance premiums to adopt similar measures.
We have major concerns,” shared Carole Walker, who leads the Rocky Mountain Insurance Information Association, in an interview with the Colorado Sun.
This policy would help cover the costs of damage from natural disasters or other losses under extraordinary circumstances.
Backers of the bill say the drastic measure is needed to keep home insurance companies in Colorado and reduce the cost premiums for homeowners.
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