Standard home insurance in Colorado covers wildfire damage, but the availability and cost of coverage are under significant pressure as climate threats mount from the peaks to the plains.
Colorado ranks directly behind California as the state with the second-highest wildfire risk. The 2021 Marshall Fire resulted in over $513 million in residential home losses alone. And according to 2025 data from the Insurance Information Institute, over 318,000 Colorado homes are at risk of extreme wildfire damage today.
Here’s what Colorado homeowners need to know about wildfires and their home insurance, including legislative updates effective July 1, 2026, and steps you can take to defend your property.
Does homeowners insurance cover wildfires in Colorado?
Yes, standard Colorado home insurance policies cover wildfire damage. Policies come with four coverage types built in. Here's how each responds to wildfire damage.
|
Coverage type |
What it covers for wildfire damage |
What it excludes |
|
Dwelling coverage (Coverage A) |
Repairs to the home’s structure |
Earth movement, flooding, pre-existing damage, negligence, and the land your home sits on |
|
Other structures coverage (Coverage B) |
Repairs to structures on your property not attached to the home (e.g., detached garages, fences, and sheds) |
The land your property sits on |
|
Personal property coverage (Coverage C) |
Belongings like clothing, furniture, and appliance if destroyed or damaged by fire or smoke |
Cash and the full cost of valuables like jewelry and collectibles, unless you add coverage |
|
Loss of use coverage (Coverage D) |
Temporary housing and additional living expenses if the property is uninhabitable after a covered loss or due to a mandatory evacuation order |
Your routine living costs, (e.g., rent/mortgage payments) |
Important note: Homeowners insurance excludes coverage for flood damage. Flooding caused by post-wildfire mudslides or debris flow is not covered unless you add a flood insurance endorsement — which is an optional add-on that broadens coverage — to your existing home policy (if available) or purchase a separate flood policy from a private insurer or the government-backed National Flood Insurance Program.
How much does wildfire insurance cost in Colorado?
Wildfire insurance is included in a standard Colorado homeowners policy. The average cost of home insurance* in Colorado is $1,301 per year for a Kin policy with $350,000 in dwelling coverage (as of May 2026).
Colorado home insurance rates (called premiums in the industry) have increased sharply in recent years, in part due to growing wildfire risk. According to a recent report by the Consumer Federation of America, Colorado homeowners saw a 27% increase in premiums between 2021 and 2024 alone. In the same timeframe, premiums rose nationally by an average of 24%.
Elevated rates heavily impact property in or near the wildland-urban interface (WUI), which includes between 30–45% of Colorado homes. For some homeowners in these areas, insurance isn't just expensive, it's hard to come by, as insurers drop existing customers and stop issuing new policies altogether.
High-risk properties facing nonrenewal and denial by standard insurers may need to turn to specialty or excess and surplus lines (E&S) insurance companies — and pay more for coverage.
For homeowners rejected by at least three private-market insurers, Colorado's Fair Access to Insurance Requirements (FAIR) Plan offers last-resort coverage with basic fire protection only. FAIR Plan coverage typically carries a steep wildfire deductible — the amount you pay out of pocket before insurance kicks in — and instead of a flat dollar amount, it's based on a percentage of your home's insured value, often 1 to 5%.
New Colorado wildfire legislation: What changes on July 1, 2026
In light of rising home insurance premiums, Colorado legislators have passed a new law aimed at lowering costs by rewarding homeowners and communities who take steps to reduce their wildfire risk.
House Bill 25-1182, signed into law by Governor Polis in May 2026 and effective July 1, 2026, requires insurance companies in Colorado to adopt wildfire risk models, catastrophe models, or scoring systems when deciding how to price and offer coverage. Insurers must also:
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Share their data: Submit the data behind their risk models or scoring methods to the Division of Insurance every time they file for a rate change
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Reward risk-reducing steps: Factor in wildfire mitigation efforts — like clearing brush or upgrading roofing — at the property and community level, or offer discounts to homeowners who have made these improvements
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Publish savings info: Post details on their websites about discounts and savings available to homeowners who take steps to reduce wildfire risk
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Notify homeowners every year: Send a written notice each year explaining any mitigation discounts, wildfire risk scores, or other risk-based classifications used to set a homeowner's coverage and renewal terms
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Allow appeals: Let homeowners challenge and correct their wildfire risk score or classification if they believe it's wrong
In other words, HB25-1182 requires insurance companies to make wildfire mitigation measures an active part of their pricing models and to incentivize homeowners and communities to take these steps.
How to protect your Colorado home from wildfire damage
As wildfire mitigation plays an increasingly important role in home insurance pricing, Colorado homeowners may want to consider these home hardening strategies.
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Create and maintain defensible space: Clear vegetation and other combustible materials within five feet of your home. Follow Colorado State Forest Service guidelines for maintaining defensible space throughout your home’s three “ignition zones.”
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Strengthen your home’s exterior: Install ember-resistant vents, non-combustible siding, multi-pane windows, and roofing materials with a Class A fire rating to reduce the impact of wildfire on your home. Some of these measures may even help you qualify for insurance discounts.
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Document your property: Create a home inventory. Photograph all rooms in your home, as well as the exterior. Document your valuables using photos, videos, receipts, and other records, and store these records either offsite or digitally. A thorough record of your property can make home insurance claims after a wildfire loss easier.
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Earn a Wildfire Prepared Home designation: Once you’ve completed eligible home hardening measures, apply for a Wildfire Prepared Home designation to potentially earn policy discounts.
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Review your home insurance coverage annually: Take time before your policy renewal each year to make sure that your home’s total insured value (specifically, your dwelling coverage limit) reflects current rebuild costs. Otherwise, if your coverage falls short and your home is a complete loss after a wildfire, you could end up paying tens of thousands of dollars out of pocket.
How to earn a Wildfire Prepared Home designation in Colorado
Wildfire Prepared, a program of the Insurance Institute for Business & Home Safety (IBHS), recently expanded to Colorado. The program offers an IBHS certification, renewable every three years, for homeowners who complete specific wildfire risk mitigation actions. Participating insurance companies may issue discounts and other incentives to homeowners with a Wildfire Prepared Home designation.
In order to qualify for the Wildfired Prepared designation, Colorado homeowners must:
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Complete all steps in the Wildfire Prepared Home How-to Prepare Checklist for either the Base (Essential) or Plus (Enhanced) designation
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Apply online with a $125 non-refundable application fee
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Upload eligibility photos and complete additional upgrades if requested
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Schedule an in-person evaluation by a qualified third party
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Follow any change requests from the Wildfire Prepared Audit Team
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Complete two annual reviews in the initial three-year designation period
From the initial photo review to the final designation, IBHS estimates that the process will take several weeks for most homeowners.
What to do if your insurer cancels or nonrenews your policy
Home insurance cancellations and nonrenewals have increased in wildfire-prone areas of Colorado. If you receive a nonrenewal notice from your home insurer, you have options.
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Know your rights: Insurers are required to give a reason for nonrenewal or cancellation and to notify you with sufficient time to shop. If you feel your policy was unfairly dropped, you may need to file a complaint with the Colorado Department of Insurance.
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Shop immediately: When you receive the nonrenewal notice, you should have at least 60 days under Colorado law to shop for a new policy before your current one expires. If this is your first nonrenewal, other standard insurers may still be willing to cover your home.
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Consider nonstandard insurers: If you’re turned down by more than one standard insurer, it may be time to request quotes from surplus lines insurers.
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Turn to the FAIR Plan as a last resort: Colorado’s FAIR Plan offers limited coverage to homeowners who can’t secure coverage elsewhere. You’ll need to submit proof of at least three declinations to qualify.
Frequently asked questions
Does homeowners insurance cover wildfires in Colorado?
Yes, home insurance covers wildfires in Colorado. However, key exclusions may apply, including mudslide, flooding, and debris flow from post-fire events, and properties located in high-risk wildfire zones may be unable to secure coverage through the standard market.
How much is wildfire insurance in Colorado?
The cost of wildfire insurance is included in the cost of standard home insurance in Colorado. Kin customers pay an average of $1,301 per year for $350,000 in dwelling coverage as of May 2026. However, costs vary throughout the state based on risk levels and other factors specific to you and your home, as well as the company, coverage, and deductibles you select.
Are wildfires covered by fire insurance?
Yes, wildfire damage is covered under standard homeowners insurance, not a separate "fire insurance" policy. Fire insurance used to be its own product, but home insurers combined it with other coverages back in the 1950s to create the modern homeowners policy. Some risks, like flooding or earthquakes, still require separate coverage today. Fire protection, however, isn't one of them — it's built into every standard home insurance policy.
What is the wildfire insurance legislation in Colorado?
The new Colorado wildfire insurance law is HB25-1182, effective July 1, 2026, which requires insurers to use wildfire risk models in setting insurance prices and to disclose these models and scoring systems to the Division of Insurance and to consumers.
