On April 11, 2025, the Colorado State Legislature introduced House Bill 1182, a significant piece of legislation aimed at enhancing transparency in the property insurance market, particularly concerning wildfire risk assessments. As wildfires become an increasingly pressing concern in Colorado and across the West, this bill seeks to address the complexities surrounding how insurers evaluate and price policies based on wildfire risk.

The primary purpose of House Bill 1182 is to mandate that insurers providing mitigation discounts or utilizing wildfire risk models must deliver annual written notices to policyholders and applicants. These notices will detail the applicable mitigation discounts, the specific wildfire risk score assigned to the property, and any other classifications used to determine insurance pricing. This requirement aims to empower consumers with clear information about how their wildfire risk is assessed and how it impacts their insurance premiums.

Key provisions of the bill include a plain-language explanation of the wildfire risk score, the range of possible scores, and the relative position of the assigned score within that range. Additionally, insurers must provide a written explanation of the factors influencing the assigned score, ensuring that policyholders understand the primary features of their property that contribute to their risk classification.

The introduction of this bill has sparked notable discussions among stakeholders. Proponents argue that increased transparency will foster a more informed consumer base, allowing homeowners to take proactive measures to mitigate their wildfire risk and potentially lower their insurance costs. Critics, however, express concerns that the bill may lead to confusion among policyholders, particularly if different insurers use varying models and risk score ranges, potentially complicating comparisons between policies.

The implications of House Bill 1182 extend beyond mere consumer awareness. As Colorado faces heightened wildfire threats, the legislation could influence how insurers approach underwriting and pricing, potentially leading to more equitable insurance practices. Experts suggest that by clarifying risk assessments, the bill may encourage homeowners to invest in mitigation strategies, ultimately contributing to community resilience against wildfires.

As the legislative process unfolds, the bill's future remains uncertain. Lawmakers will need to navigate the balance between consumer protection and the operational realities of the insurance industry. If passed, House Bill 1182 could set a precedent for similar legislation in other states grappling with wildfire risks, marking a significant shift in how property insurance is managed in high-risk areas. The ongoing discussions surrounding this bill highlight the critical intersection of environmental challenges and economic considerations in the realm of insurance.