Let’s get right to it: Colorado’s property insurance system isn’t breaking. It’s already broken.
Premiums are soaring, deductibles are ballooning, policies are shrinking—and the worst part? It’s not your fault.
You didn’t cause the storm surge. You didn’t torch the economy. You didn’t rewrite the fine print. But here we are—paying the price anyway.
So what the hell happened?
The Perfect Storm That Broke the System
It’s easy to blame hail as the villain—and no doubt, Colorado’s hail is biblical—but that’s only one chapter of the story.
The real breakdown came from a compound crisis, a chain-reaction event that no spreadsheet at any insurance company saw coming.
COVID Changed Everything
In 2020, the global economy slammed on the brakes. What followed?
- Supply chains collapsed. Roofing and building materials became scarce due to mill closures, port congestion, and reduced workforce availability. Asphalt shingle costs, in particular, surged [¹].
- Skilled labor vanished. Construction labor participation dropped, and demand for roofers outstripped supply [²].
- Insurance pricing models stayed frozen in time. Carriers continued using legacy pricing assumptions, even as claim costs soared [³].
Inflation Didn’t Just Raise Costs—It Shattered the Math
Post-COVID, inflation hit construction like a sledgehammer:
- Material costs rose across the board. Asphalt shingles jumped 16% year-over-year by early 2022 [⁴].
- Roofing labor costs followed suit, rising 20% or more in some areas due to labor shortages and higher wage demands [⁵].
- Fuel prices increased 55% in 2022 alone, affecting material delivery and contractor costs [⁶].
And meanwhile…
The Hail Didn’t Stop. It Got Worse.
In 2023, Colorado suffered historic hail activity:
- The state recorded the highest number of large hail events in history, with NOAA confirming a record count of “significant” hail (1″ or larger) statewide [⁷].
- The Front Range, particularly metro Denver, logged 46 hail events within a 10-mile radius, per Stormersite data [⁸].
- Nationally, the U.S. logged 6,962 hail events in 2023—up 57% from 2022 [⁹].
This wasn’t a fluke. It was an explosion.
When Claims Balloon, Carriers Pull the Ripcord
From an insurer’s standpoint, it’s simple math:
- Materials ↑
- Labor ↑
- Hail frequency ↑
- Claim severity ↑↑↑
That means shrinking profits—or worse, losses.
Instead of adjusting gradually, many insurers panicked. They responded by:
- Raising deductibles (from flat to 1–2% of dwelling value).
- Switching from RCV to ACV policies—limiting payouts to depreciated values.
- Exiting entire zip codes or states, such as American Family and Farmers reducing exposure in hail-prone zones [¹⁰].
The Rules Changed — And Not in Your Favor
Here’s the kicker: You didn’t lose coverage. It was rewritten out from under you.
Policies now include:
- Cosmetic exclusions that deny coverage unless a roof is leaking or structurally compromised [¹¹].
- Roof surface exclusions, especially for older shingles, that severely limit payout eligibility [¹²].
- Managed repair programs that force homeowners to use carrier-selected contractors [¹³].
In short: you still pay your premiums, but the promise has shrunk to fit the insurer’s comfort zone.
2023 Was the Breaking Point—But Not the End
This isn’t a cyclical dip. This is a market correction. And for many carriers? That means:
- Dropping policyholders in high-claim regions.
- Capping or denying roof coverage altogether on policies more than 5–10 years old.
- Offering only ACV policies on new homes in storm-prone counties.
Insurers aren’t adjusting—they’re evacuating. And homeowners are footing the bill.
What Needs to Change (But Won’t)
We need:
- Clear disclosures on ACV vs. RCV during the buying process.
- Standardized language across carriers.
- Claims transparency—denials must include citations to specific policy language.
But what we’re likely to get is:
- More automation.
- Less accountability.
- Higher premiums with fewer benefits.
What You Can Do Right Now
1. Audit Your Policy
Is your roof covered at RCV or ACV? What is your hail deductible? Are cosmetic damages covered?
2. Work with Local Agents
They often know the regional carrier landscape better than national reps.
3. Document Your Roof Before It Storms
Pre-claim documentation helps you fight denied or underpaid claims later.
4. Partner with Experts
At Blue Peaks Roofing, we:
- Perform policy reviews.
- Document every slope, facet, and penetrable system.
- Guide you through claims so you don’t get steamrolled.
Because the sad truth is: you can’t afford to wing it anymore.
Final Thought: You Didn’t Start This War—But You’re in It
2023 showed us where this is going. And unless you’re prepared, your next hailstorm could come with a $15,000 deductible, a denied claim, or both.
So:
- Read your scrolls.
- Question every line item.
- And when the clouds roll in, don’t just call a roofer—call a strategist.
Because in this market?
I’d Roof That.
What’s Next?
So where does this all go? If you think we’ve hit bottom, buckle up.
Because what’s coming isn’t a return to normal. It’s the new operating system of insurance in catastrophe-prone regions. And it’s designed to protect capital—not homeowners.
Here’s what’s next:
1. Widespread Shift to ACV
Replacement cost coverage is going extinct in many ZIP codes. By 2025, expect even mid-tier carriers to limit RCV to premium clients or new homes only. For everyone else? You’ll be paid for the roof you had—not the roof you need.
2. Carrier Exits and Zip Code Blacklists
Already happening. More insurers will quietly stop writing new policies in areas flagged as “catastrophe dense.” Think: anything along the Front Range. Existing policyholders may see non-renewals in 2025-26 as loss ratios keep climbing.
3. Bundled Repair Mandates
Managed repair programs will expand. Carriers will say it ensures quality. What it really does? Keeps claims artificially low by using volume-discounted contractors who answer to the insurer—not you.
4. Policy Language Becomes Weaponized
Exclusions will get more complex. Some policies already exclude damage to surfaces “visible from ground level” unless the roof is leaking. Expect more legal gymnastics to define “functional” vs. “damaged.”
5. Claims Become a Two-Year Battle
The new model is delay, deny, depreciate. Homeowners will need to fight for every check. If you’re not documenting, supplementing, and escalating with precision, you will lose.
So if you’re waiting for rates to drop or policies to improve?
Stop.
What’s next is already here. It’s just unevenly distributed—for now.
Your only move is to get ahead:
- Know your policy.
- Know your rights.
- Know your strategy.
And when the skies darken, don’t just brace for impact.
Move first.
Sources
- NAHB Eye on Housing – Supply Chain Challenges Persist in Residential Construction (2021): https://eyeonhousing.org
- U.S. Bureau of Labor Statistics – Employment in Construction, Roofers
- Insurance Business America – Why carriers are pulling out of catastrophe zones
- Construction Dive – Shingle prices continue to climb amid tight supply
- HomeAdvisor Roofing Cost Index, Q1 2022
- U.S. Energy Information Administration – 2022 Fuel Trends
- 9News Denver – 2023: Most Large Hail Ever Recorded in Colorado (Link)
- Stormersite – Denver Hail Report 2023 (Link)
- RMIIA – 2023 Hail Statistics (Link)
- Insurance Journal – Carriers Limit Exposure in Hail-Prone States
- State Farm, Farmers, and Travelers Policy Samples (publicly available filings)
- Colorado Division of Insurance – Roof Surface Endorsements Explained
- Consumer Reports – The Pros and Cons of Managed Repair Programs in Homeowners Insurance
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