For those of us who live in Colorado, you've likely seen firsthand:

• Your homeowners insurance has jumped, sometimes dramatically
• Your auto premiums keep creeping higher, despite not filing a claim in the preceding years
• And the explanation is always the same

"Claims are increasing, so premiums have to increase."

That sounds logical. But when you look at the data, both nationally and here in Colorado, a different picture emerges.

In truth, insurance companies are collecting more money than ever, becoming more profitable, and paying out less of each premium dollar in claims.

Colorado Families Are Paying More

Let's start with what we all already know. 

Insurance costs in Colorado have surged:

• Homeowners premiums increased about 58% from 2018 to 2023
• Colorado is now one of the most expensive states in the country for home insurance
• The average premium is roughly $4,000+ per year
• Some households have seen increases of 50% or more in just a few years

And more recently:

• Home insurance rates in Colorado have doubled since 2018

There's no question, Coloradans are paying more. But why?

The Industry's Explanation: "More Claims"

Insurance companies point to:

• Wildfires
• Population growth
• Hailstorms
• Litigation

Those environmental factors are real; Colorado does face unique risks.

But here's the problem with the insurance industry's justification: Those risks do not fully explain what's happening with premiums.

What the Data Actually Shows

Even in Colorado, where risks are real, the industry has historically been profitable.

For example, from 2010 - 2019, homeowner insurers in Colorado had an average loss ratio of just 55%. That translated into roughly a 15% profit margin.

That means insurers were paying out barely half of what they collected in premiums. Yes, there have been some harder years recently, but that's not the whole story.

Colorado homeowner premiums almost tripled from $1.9 billion in 2014 to $5.2 billion in 2024. 

The National Context Matters

Across the U.S.:

• Premiums are rising faster than claims
• Loss ratios are declining
• Profitability has rebounded strongly

In other words: Insurance companies are keeping more of every dollar they collect. And that includes the premiums paid by Colorado families.

The Key Question

If insurance companies truly needed higher premiums just to cover claims...

Why are they spending billions on advertising?

Tune into any sporting event or primetime broadcast and it's easy to see that insurance is one of the most heavily advertised industries in America.

 Major carriers are pouting enormous sums into marketing:

• Spending billions of dollars annually across top insurers
• Massive increases in advertising budgets in recent years
• Constant national campaigns: TV, digital, sponsorships

This matters because:

Advertising doesn't pay claims, policyholders do.

And if insurers were truly struggling to pay losses, we would expect reduced marketing budgets, cost-cutting measures, and conservative growth strategies. 

While industry insiders point to Colorado having a "highly litigious climate" - they have no evidence to back that up. In our experience, litigation only occurs when insurance companies fail to pay reasonable compensation to their policyholders for serious property damage or personal injuries. Again, if insurers were truly struggling with such a litigious populous such that they aren't able to pay out claims, why do they represent one of the largest advertising segments in the market? 

When premiums rise faster than claims, the result is simple:

• Insurance companies retain more revenue
• Profitability improves
• Consumers pay more for the same (or less) coverage

In many cases, policies have higher deductibles, coverage limits are reduced, and claims are more aggressively disputed.

The Bottom Line

The narrative you're being told is incomplete: "More claims = higher premiums."

The reality is more complicated:

• Premiums in Colorado have skyrocketed
• The industry has historically been highly profitable
• National data shows insurers are becoming more profitable again
• And companies are spending billions to grow, not survive

If Your Claim is Denied or Underpaid, You're Not Powerless

Insurance companies have teams of adjusters, lawyers, and financial incentives with one goal in mind: maximize profits while minimizing payouts.

While most of the data relates to homeowner policies in Colorado, the consistent denial or low-ball offers in personal injury claims are equally as common. 

Which is why plaintiff lawyers exist: to stand up to the billion-dollar insurance industry when they aren't treating people fairly. 

If you or a loved one has suffered a personal injury, the insurance company's primary objective is to pay you as little as possible. Contact us today for a free consultation.