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Homeowners insurance in Colorado skyrockets, Louisville condo owners see sevenfold increase

Colorado homeowners buying multiple policies to fully protect home
Colorado homeowners buying multiple policies to fully protect home 03:23

Some condo owners in Louisville are reeling after their homeowners insurance jumped 700%. And they're not the only ones experiencing sticker shock. Premiums are soaring across Colorado due to high inflation on top of devastating fires, floods and hailstorms.

Karen Horan is among those wondering how she'll afford the increase.

"I had a plan. I could afford to live here forever," she said. 

She bought a condo in Louisville condo 16 years ago, a place she could afford to raise her kids and retire.

She didn't account for the Marshall Fire.

"I was at the hotel watching the news and I watched my home burn down," she said. 

Her place is one of 30 destroyed at Wildflower Condominiums -- the only multi-family complex impacted by the wildfire in Louisville. 

Residents had to fight to be included in debris clean-up, meet commercial building codes, and find a specialized contractor. They just broke ground on new buildings last month.

"I think a lot of us felt this huge sigh of relief," says Brooke Mann, whose condo was spared in the fire. 

She thought maybe they'd turned a corner in the recovery process.

Then came the notice from American Family Insurance canceling the master policy for their complex with no explanation.

"So our board -- six volunteers, regular people -- have had to beat the bushes to try to find some sort of replacement coverage," says Mann. "They've cobbled together a combination of five insurance carriers at just a massively increased premium rate."

Instead of $60,000, their premium is now $425,000 on top of individual policies for contents, HOA fees, and a special assessment if the rebuild goes over budget.

"It's shocking," says Horan who planned to retire next spring. She's now put that plan on hold.

"I don't know if I can afford to live here," she said. 

It gets worse. The complex is now designated as non-warrantable, which means it's a high risk for lenders.

"Say someone wanted to get a home equity loan to cover this huge new insurance premium, it's unclear if that would even be possible anymore because of this unwarrantable designation that we now have," she said.

State Rep. Kyle Brown, who lives in Louisville, is trying to help.

"I'm here to be creative, to come up with first-in-the-nation solutions because that's what this is going to take," he said. 

He brought a bill last session to protect against under-insurance. He's now working on legislation to address affordability and availability of insurance.

"We need choice, we need competition, we need a healthy market and right now there's so much uncertainty and volatility in the homeowners insurance market that it's making it very difficult for folks to come home and stay home," he said. 

The state legislature passed a law creating a quasi-governmental insurer-of-last-resort for homeowners who can't get insurance anywhere else. 

The Division of Insurance will begin stakeholder meetings over the next few months and roll out the plan -- that will be bare bones -- sometime next year. 

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