Colorado Advances Wildfire Insurance with Predictive Tech Models

Colorado is set to implement a new wildfire insurance law on July 1, 2026, allowing insurers to use advanced predictive modeling to assess and price wildfire risk. This move marks a shift away from traditional, outdated risk assumptions toward data-driven insights using factors like vegetation density, climate trends, and past fire activity. As wildfires grow more frequent and severe due to climate change, the law is intended to create a fairer and more sustainable insurance market.

California has taken a similar route, recently launching the country’s first public wildfire catastrophe model with academic partners to improve pricing transparency and insurer resilience. These efforts show a growing industry trend toward embracing technology to handle natural catastrophe risks more efficiently.

While the new law promises better alignment between risk and premium costs, it also raises concerns about affordability for homeowners in high-risk zones. The model could lead to more targeted pricing, which may result in higher rates for some while sparing others from broad premium increases. Balancing fairness and affordability will be a key challenge moving forward.

One component missing from Colorado’s legislation is a public wildfire reinsurance program, which lawmakers debated but ultimately rejected. Despite this, the adoption of modeling signals a proactive approach, one that could influence other wildfire-prone states to modernize their insurance systems. The message for homeowners is clear: now is the time to review your coverage and prepare for a risk environment that’s not going away.