House Bill 1182, introduced in the Colorado State Legislature on April 11, 2025, aims to enhance transparency and accountability in how insurance companies assess wildfire risks. As wildfires become an increasingly pressing concern for Colorado residents, this legislation seeks to ensure that insurers provide clear information about the models they use to determine risk and set rates.

The bill mandates that insurers utilizing wildfire risk models or catastrophe models must disclose detailed information about these models to the state’s insurance commissioner. This includes a description of the model, its impact on insurance rates, and an actuarial justification for all rating factors, including any discounts for mitigation efforts. Additionally, insurers are required to report how their models account for statewide wildfire mitigation activities, such as forest treatments and investments in firefighting resources.

One of the key provisions of House Bill 1182 is the protection of proprietary information. The models submitted to the commissioner will be treated as trade secrets, exempt from disclosure under the Colorado Open Records Act. This aspect has sparked debate among stakeholders, with some arguing that while trade secret protections are necessary for insurers, they could hinder public understanding of how wildfire risks are assessed and priced.

Supporters of the bill emphasize its importance in promoting fair insurance practices, particularly for homeowners in high-risk areas who may face steep premiums. They argue that by requiring insurers to justify their risk assessments, the bill could lead to more equitable pricing and encourage investment in wildfire mitigation efforts. Critics, however, express concerns that the bill may not go far enough in ensuring that all relevant data is considered in risk assessments, potentially leaving some communities vulnerable.

The implications of House Bill 1182 extend beyond insurance rates; they touch on broader issues of community safety and resilience in the face of climate change. As Colorado continues to grapple with the realities of wildfires, this legislation could play a crucial role in shaping how residents prepare for and respond to these natural disasters.

As the bill moves through the legislative process, its outcomes will be closely watched by both the insurance industry and residents alike, with the potential to significantly impact how wildfire risks are managed and communicated in Colorado.