Catastrophe claims have caused the claims in the state to be among the most costly.
According to recently released homeowners insurance news data, Colorado is now among the top ten states with the highest claims payouts resulting from catastrophes and natural disasters.
This news was based on information from an analysis performed by the Insurance Research Council (IRC).
The council’s analysis revealed that from the years 1997 through 2006, 26 percent of the homeowners insurance claims that were made in the state were the result of damage from catastrophes. However, from the years 2007 through 2011, that figure rose considerably, becoming 41 percent of the claims. These payouts were to cover large scale disaster events. This is the ninth highest percentage in any American state.
The homeowners insurance figure may worsen yet again this year following massive wildfires in the state.
This past summer was the worst that Colorado has ever experienced in terms of destroyed properties, as wildfires swept their way across many areas of the state. This year was not included in the homeowners insurance analysis. That said, it is typically hailstorms and not wildfires that cause the largest destructive problem in the state.
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The IRC’s vice president, David Corum, pointed out that today’s houses are also becoming increasingly expensive to repair. Moreover, homes in Colorado are being built in areas that are increasingly remote. This can also add to the final cost of homeowners insurance claims.
This is the first time that the homeowners insurance statistics from Colorado‘s disaster claims have placed it in a similar category as states such as Louisiana and Texas, which are more traditionally affected by natural destructive events. Experts in the industry have explained that this trend means that the insurers in the state could experience growing stress levels to their finances, and this upward pressure will be translated into the premiums that are paid by policyholders.
At the moment, the average homeowners insurance premiums paid by residents of Colorado are already higher than the average across the country. In 2007 the state average had been $826, but this rose to $893 by 2009.