A proposed Colorado bill aimed at adding a 1% fee to homeowners insurance policies has been rejected by a state committee. This decision came during a recent meeting of the Senate Finance Committee, which voted 6-2 against House Bill 1302.
The bill, backed by Governor Jared Polis and several Democratic leaders, was designed to help manage the rising costs of home insurance in the state. If passed, it would have established a state-run initiative called the Strengthen Colorado Homes Enterprise. This enterprise would have charged a fee to homeowners with insurance policies from both private insurers and the FAIR plan association, which provides coverage in high-risk areas.
The revenue from this fee was intended to fund a grant program. Homeowners could have used these grants to make their homes more resilient against extreme weather, including high winds, wildfires, and hail. The bill also aimed to reduce the financial risks for insurance companies by having the state buy reinsurance for policies covering wildfire-prone areas.
However, some committee members expressed concerns about introducing a new fee, especially as many residents are already struggling with the high cost of living. State Senator Judy Amabile, a Democrat from Boulder and the bill’s lead sponsor, voiced her frustration during the committee meeting, stating that doing nothing would only allow the problem to worsen.
The failure of House Bill 1302 highlights the ongoing challenges Colorado faces with home insurance costs and the impact of climate change on the state’s housing market.