Somewhat lost in the chaos of Colorado’s skyrocketing property taxes, another steep increase in the cost of owning a home has gone under the radar: homeowners insurance.

Around the state, the average cost of homeowners insurance increased by 19.8% between 2021 and 2023, according to one analysis. And between 2023 and 2024 it is expected to increase another 7%, driving the average annual cost from $4,072 to $4,367.

The reason for this particular increase, we all know, is the ever-growing risk of wildfires thanks to the way our environment is changing due to climate change.

With risk increasing and rates already climbing, now is the time to address this issue before it becomes a crisis. First, we need to get Colorado’s newly created backstop insurance policy up and running for those who are being denied insurance through traditional means. And second, the Colorado Division of Insurance must find a way to ensure that individuals and communities invested in wildfire mitigation efforts see that reflected in their insurance rates.

A recently released wildfire risk assessment report, which insurance companies use to set rates, painted a grim picture for Colorado. According to the report, 321,294 homes across the state valued at $141 billion are at risk of being destroyed by wildfires.

It might be easy to assume that the houses at risk are mostly those built throughout Colorado’s wildfire-prone mountains — homes built and bought by people who understand the risks. And while many of them are, nearly 120,000 of them are actually in the Denver and Colorado Springs metro areas.

These are the homes that exist in and around communities in what is called the wildland urban interface, houses near open spaces or on the outskirts of a town — the sort that sadly just burned in the Stone Canyon fire near Lyons and the Alexander Mountain fire west of Loveland.

What’s worse is that our community is all too aware of the fact that a wildfire is not limited to open spaces or the outskirts of town. In our climate, with the right conditions, a wildfire has the potential to tear through our urban communities.

The real tragedies of the Marshall Fire were, of course, the nearly 1,100 homes that burned to the ground in Louisville and Superior, the dozens of destroyed businesses and the two lives that were lost. But in addition to the destruction from the flames and smoke, the fire was catastrophic for insurers.

Pointing this out is not an effort to gin up sympathy for insurers — some of whom made getting payouts for those who lost their homes incredibly difficult — but rather to point out the painful reality of insurance.

The Marshall Fire cost insurers more than $2 billion. A financial hit of that size can drain reserves and will inevitably cause insurers to reassess rates — and not just the rates for those in fire-prone areas but statewide.

That’s how insurance works.

But worse than simply raising rates, some insurers simply began to refuse coverage for homeowners in at-risk areas. In the wake of the Marshall Fire, property owners in Gold Hill, Sugarloaf and elsewhere in Boulder’s mountain communities found themselves unable to insure their homes.

To be clear, some were quoted astronomical rates, up to $17,000 for an annual plan, but others were simply refused a policy altogether.

On top of the fact that some of our community members are no longer able to even insure their homes, there are also claims from regulators that insurance companies are not taking mitigation efforts into account when assessing a property.

“What the majority of (insurance companies) don’t do at all is incorporate state-level or community mitigation,” Colorado Insurance Commissioner Michael Conway recently told the Denver Post. “They have been telling homeowners they have to mitigate to keep insurance affordable and available. But if they’re not going to take that into account, that’s a very big problem.”

These two issues — lack of coverage for vulnerable properties and the lack of consideration for mitigation — must be solved.

Thankfully, Colorado legislators have already got the ball rolling on the first issue.

Elected officials, led in part by Boulder’s Judy Amabile, passed the Fair Access To Insurance Requirements Plan in 2023. The FAIR Plan is designed to provide property insurance to homeowners and businesses when it is otherwise unavailable. It was a great step in the right direction, but one that has yet to go into effect, with policies not set to be offered until 2025.

Colorado has to make sure to get the FAIR Plan up and running as soon as possible, and it has to make sure it is set up to successfully provide coverage to homeowners with high-risk homes.

Then, the Colorado Division of Insurance has to find a way to make insurers recognize the value of mitigation.

Boulder County has done a fantastic job of prioritizing wildfire mitigation, including passing a sales tax that collected $8.9 million last year just for mitigation. If homeowners and communities are putting in the work to harden their homes and businesses against fires, insurance companies need to recognize that and it needs to be reflected in rates.

Our community may be becoming steadily more fire-prone, but we are not sitting on our hands. We are putting in the work to fight back, and in doing so we are potentially preventing insurers from taking another big Marshall Fire-sized hit.

And finally, increasing insurance rates are just one of the many tangential symptoms of our collective lack of environmental stewardship. We have to once again look at the bigger picture — as a community, as a state and as a nation. Climate change is having a real and tangible impact on Colorado — and on Boulder County. Extreme weather events are getting more common. As the planet warms, the High Plains are getting drier. Colorado’s natural areas — more than ever before — are becoming kindling, and the climate is the furnace.

That means our responsibilities today are twofold: address the symptoms and the causes. Our elected leaders and regulatory bodies must address the shortcomings in the insurance industry in Colorado. And we all must get even more serious about addressing climate change.

Gary Garrison for the Editorial Board