Colorado Gov. Jared Governor Polis signed a bill into law that proponents say will lower the price of homeowners insurance in Colorado,
Polis signed SB26-155, called Increase Access Homeowner’s Insurance Enterprise, designed to make it more affordable for residents to get hail proof roofs, help decrease premiums and increase market competition in high-wildfire areas. The bill is part of Polis’s efforts he says will save Coloradans $800 each year on homeowners insurance.
The bill, sponsored by Speaker Julie McCluskie and Representative Kyle Brown, and Senators Kyle Mullica and Janice Marchman, creates an enterprise governed by a seven-member board, including the commissioner of insurance or their designee; members with expertise in home hardening, risk mitigation, resilient roof systems, and insurance underwriting or actuarial analysis; and members representing the interests of insurance companies, consumers, and counties.
The enterprise will impose an annual fee of 0.5% starting in 2027 of the total premium collected by admitted insurers selling multiperil homeowner’s insurance policies in the state.
The fee will go to efforts including:
- Defraying the cost of retrofitting residential property by providing grants for the installation of resilient roof systems. At least 85% of the fee revenue must be used for grants to Colorado homeowners to retrofit residential property to reduce insurer losses due to hail and windstorms.
- Analyzing data on hail losses to identify areas of the state to target for installation of resilient roof systems;
- Setting standards for resilient roof systems and awarding workforce training grants for installing and certifying resilient roofs;
- Creating codes of conduct for roofing contractors to ensure roofs are properly and appropriately installed;
- Conducting or contracting with a third party to conduct a study to analyze insurance risk in high-risk wildfire areas of the state.
GEICO required the policyholder to submit additional documentation under threat of cancellation. The policyholder believed she had submitted the requested documents and was not informed she had not. Her policy was cancelled without her realizing it, resulting in her driving uninsured.
According to Sunday, the state was concerned about the overall fairness of the process and its likelihood of confusing new policyholders selected for underwriting review. The state also alleged that GEICO did not make it clear to the consumer that her document submission was inadequate to prevent cancellation.
Without admitting any violation of the law, GEICO has agreed to follow the Pennsylvania Insurance Department’s guidance on the use of artificial intelligence systems by insurers. The insurer also agreed to add a week to the period for new policyholders selected for review to submit requested documents.
Additionally, GEICO agreed to allow consumers to provide one form of verification of residency rather than two and to permit a copy of a consumer’s current driver’s license to serve as proof of residency, so long as the address on the license matches the policy. The company will also train customer service representatives regarding the updated requirements and the need for clarity throughout the process.