Democratic Gov. Jared Polis signed into law Colorado House Bill 25-1182 last week, marking a significant regulatory shift in how insurers use catastrophe and wildfire risk models when underwriting homeowners insurance.
The legislation, effective July 1, 2026, follows the recent failure of a proposal to create a publicly backed wildfire reinsurance backstop in the state.
While the law affirms the use of catastrophe models in setting wildfire-related rates, it also introduces new requirements for transparency, consumer protection, and recognition of mitigation efforts, fundamentally reshaping how private-sector risk models are used in underwriting, pricing, and renewals.
A breakdown of the law's impact on insurers and risk model developers includes:
Definitions and Scope of Models
- The law formally defines “wildfire risk models” and “catastrophe models” as tools that are map-based or simulation-based and used to estimate property-specific and community-level wildfire risk.
