Colorado is certainly a beautiful place to reside in and one that I am proud to call home. We are surrounded by natural beauty that is enjoyed with more than 300 days of sunshine. As others throughout the country have found out about our great state, we have experienced a significant increase in population.
In addition to a growing population, many other factors will continue to impact our local market as it pertains to insurance – weather related incidents being among them. As such, insurance carriers consider Colorado as the worst state in the nation for hail damage. The hail storm on May 8, 2017 was financially the worst storm in our state’s history; with over $1,000,000,000 in damages paid out by carriers. These payouts will result in carriers making adjustments that will likely impact everyone that owns property. Carriers are continually analyzing their exposure throughout the Front Range and also how to minimize their potential for catastrophic losses. Many carriers will be increasing flat wind/hail deductibles to $10,000 per building and up to $25,000 in some cases. Here in the Front Range, other carriers will only be offering percentage deductibles. Many misinterpret what these percentage deductibles mean. A percentage deductible is of the building value, not the value of damage. For example, if your building is valued at $1,000,000, a 2% wind/hail deductible equates to a $20,000 deductible. Carriers are using anywhere from a 1% to a 5% deductible.
Another problem area is auto insurance. Auto has been the least profitable line of business for insurance carriers for several years now. Industry loss ratios have been upwards of 140% for this line of insurance. Many factors, such as distracted driving and higher valued automobiles, are contributing to the poor experience carriers are facing. To combat this, many carriers are increasing comprehensive and collision deductibles. Many are also eliminating $250 or $500 deductibles and instead offering a $1,000 deductible as the lowest available.
These are two areas where we will see issues in the near future but rest assured that your CRS Insurance Brokerage team is here to help. Please do not hesitate to ask how we can assist with your immediate concerns.