Rob Bhatt is a home insurance expert at Lending Tree. We'll discuss their new report that shows that over the past 6 years, no state in the country has had a bigger percentage increase in homeowner's insurance costs than Colorado has: State of Home Insurance: 2025 | LendingTree
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
More of an analysis that didn't surprise me, but I
wished it did surprise me. And this is a report
from lending Tree entitled State of Home Insurance twenty twenty five.
And I'm just going to jump to one little part
here and then we're going to bring my guest.
Speaker 2 (00:21):
On the show.
Speaker 1 (00:22):
In the six years from gosh, what years are these,
twenty nineteen till now, I think home insurance rates rose
more in Colorado than in any other state twenty nineteen
through twenty twenty four, seventy six point six percent cumulatively
in the state of Colorado. Shocking sort of. But if
(00:47):
you live here, I guess you knew the numbers were bad.
Maybe you didn't know they were quite that bad. Joining
us to talk about it. Rob Batt is a home
insurance expert and licensed insurance agent with lending Tree.
Speaker 2 (01:02):
Hey, Rob, thanks for being here. Thank you.
Speaker 1 (01:06):
I want to get a handle on why rates have
gone up so much in Colorado, and it seems to
me there are two primary possibilities, and maybe the answer
is both, but I want you to tell me. One
is actual risk or perception of risk in terms of
houses being damaged or destroyed, and the other is the
actual price of real estate and new construction going up.
(01:27):
So what are we looking at.
Speaker 2 (01:30):
Very're exactly right.
Speaker 3 (01:31):
It's a combination of these two factors.
Speaker 1 (01:33):
You know.
Speaker 3 (01:33):
One of the things we've seen is an uptick in
the number of really severe catastrophic storms that have done
mass damage. We're talking about these powerful thunderstorms, hailstorms, tornadoes,
and the other part of that, and of course wildfires
as well. And then the other part of that is
with inflation, the cost to repair or rebuild homes has
(01:55):
gone up too. So there's these are two factors that
are complicating each other and driving up the cost that
insurance companies have to pay out to settle these claims
and rebuild homes. And unfortunately, those costs gets passed on
to us as consumers in the form of higher home
insurance rates.
Speaker 1 (02:13):
We had a big blow up here in Colorado is
really a political thing a couple of years ago, because
in the immediate aftermath of COVID and zero interest rates
and all the helicopter money and all this stuff, real
estate prices just went crazy and the and it showed
(02:35):
up in property tax bills, right, and so in the
counties around Denver, for example, Douglas County of Very, a
major county just to the to the south of Denver,
their average increase in property tax assessments was forty percent
forty so this.
Speaker 2 (02:54):
Was a huge political thing.
Speaker 1 (02:55):
So as I see here in your data, seventy six
point six percent increase in home insurance rates. So that
forty percent was just over two years. There was plenty
of other years before that. What I'm getting at, and
taking much too long to do it, is how much
of this huge increase in home insurance cost do you
(03:16):
think is due to the price of real estate and
construction going up versus perception of increased risk here in
Colorado because we did also have that huge Marshall fire,
which was in a place that probably most people thought
there really couldn't be a big fire.
Speaker 3 (03:31):
Well, these things are tied together in the sense that
you know, when you look at the value of real
estate includes the value of land plus improvements like buildings
and stuff like that. When you look at insurance rates,
you know it's your insurance rate is based largely on
the cost the potential cost of rebuilding your home if
it's completely destroyed. That's that's what lenders require for a
(03:54):
loan to protect their financial interest and that's usually you know,
what insurance companies offer. So the price of land itself
doesn't affect your real estate. I'm sorry, it doesn't affect
your insurance rates so much. But in addition to land,
when you look at a lot of the new homes
that are going up, some of them are custom built homes.
They have more intricate features, they have more advanced features,
(04:17):
and so they're also more they're more expensive to rebuild.
And then the other thing is, you know, with the
potential risk we're talking about, uh, you know, I imagine
this in a lot of parts of the country, and
I believe this is true in several areas in Colorado
as well. You have homes going up in these urban
wild wildland interface areas and these are the most beautiful
(04:37):
places to live, but they also have the highest potential
fire risk. You know, with a with these areas, these
these urban interface areas, if there's a wildfire, it could
potentially take out several homes. You know, that's different than
a traditional house fire, like say something starts in your kitchen,
your garage, or something where that fire will take out
one home and the insurance company only has to pay
(04:59):
to re build one home with wildfires, insurance companies might
have to pay to rebuild twenty or thirty or fifty homes.
So that's also another increased you know, that's that's an
increased risk for them in terms of they're taking on
more risk because these areas have higher chances of being
exposed to a wildfire.
Speaker 1 (05:19):
So I'm a homeowner and these insurance rates are absolutely brutal,
and I look for everything I can do to try
to get my rates down.
Speaker 2 (05:28):
A couple of the.
Speaker 1 (05:28):
Things have been make sure I have a reasonably hail
resistant roof. Make sure when I lived up in the hills,
make sure that it didn't have trees too close to
the house, you know, for trying to prevent a fire
from getting too easily to the house. What are other
things that or or raising deductibles? What are other things
that our listeners that my listeners can can do to
(05:51):
try to reduce their home owners insurance premiums?
Speaker 2 (05:54):
And as part of that answer, maybe let me know.
Speaker 1 (05:58):
Whether whether they're there are large differences and prices from
one company to another.
Speaker 2 (06:03):
Right are you are.
Speaker 1 (06:04):
You likely to be able to find a much better
insurance deal by shopping around or are they all pretty close?
Speaker 3 (06:12):
You know, they're pretty close. We've seen differences of ten
to twenty percent by shopping around a couple one hundred
bucks a year. So it's it's something. It's it's it's
still painful. Yeah, I wish there were easy answers. I mean,
the things you mentioned are all good first steps in
terms of shopping around, choosing a higher deductible investing in
(06:35):
your home to make it better able to withstand the elements.
That includes hail resistant roofs, windproof windows, fire resistant materials
in the in the areas that are exposed to wildland fires,
and you know, the other thing. Another thing you could
do to avoid rate increases is just to avoid small claims,
like if you have a say, a broken window or
(06:57):
something that's only going to cost a couple of thousand dollar,
just pay for it yourself versus filing a claim. Insurance
companies get really jittery with clients who file claim, so
if you have one claim, your rates will go up.
If you have two claims, they might drop you. You know,
in the old days, people used to talk about five
hundred dollars deductibles, but you know that's five hundred dollars
just doesn't go as far as you used to. You know,
(07:19):
if you're you're talking about something that's going to cost
a few thousand dollars, maybe even three or four thousand
dollars in the long run, you might you might just
be better off paying for it yourself, you know, assuming
you have the resources to do that.
Speaker 2 (07:31):
Yeah.
Speaker 1 (07:31):
I mean, we we sold a house and then we
bought a house, so we're starting over with insurance. And
I noted that in that process of applying for insurance
on the new place, one of the questions was have
you ever filed a homeowner's insurance claim?
Speaker 2 (07:45):
And you know that you don't want to answer yes
to that.
Speaker 1 (07:48):
I mean, you have to answer truthfully, but you know
that you know you'll be much better off if the
answer is no. I'll give you the last seventeen seconds much.
Speaker 3 (07:56):
Better off the answer is no. And they actually they
can check. They'll run it at the last stage of
the process. Yeah, and so if something shows up that
you didn't initially, they have insurance company data. You know,
the insurance company databases can pull up those things, including
prior claim, so the don't find out eventually, it's just
a matter they don't. Sometimes they don't check until the
very end of the process, and then you might get
(08:17):
a surprise where the rate you saw on your quote
is going to be different lower than what they actually
want to charge you.
Speaker 1 (08:23):
Rob that is a lending Tree home insurance expert. He
joined us to talk about their new reports State of
Home Insurance twenty twenty five, which said that home insurance
rates rose a little bit over forty percent nationwide from
twenty nineteen to twenty twenty four, but rose nowhere faster
than in Colorado over seventy six percent. Right here, we've
(08:46):
all felt that pain. Rob, thanks so much for your time.
Speaker 3 (08:50):
I wish we could speak about a more pleasant subject,
but it's a pleasure and thank you.
Speaker 2 (08:55):
Glad to do it.
More of an analysis that didn't surprise me, but I
wished it did surprise me. And this is a report
from lending Tree entitled State of Home Insurance twenty twenty five.
And I'm just going to jump to one little part
here and then we're going to bring my guest.
Speaker 2 (00:21):
On the show.
Speaker 1 (00:22):
In the six years from gosh, what years are these,
twenty nineteen till now, I think home insurance rates rose
more in Colorado than in any other state twenty nineteen
through twenty twenty four, seventy six point six percent cumulatively
in the state of Colorado. Shocking sort of. But if
(00:47):
you live here, I guess you knew the numbers were bad.
Maybe you didn't know they were quite that bad. Joining
us to talk about it. Rob Batt is a home
insurance expert and licensed insurance agent with lending Tree.
Speaker 2 (01:02):
Hey, Rob, thanks for being here. Thank you.
Speaker 1 (01:06):
I want to get a handle on why rates have
gone up so much in Colorado, and it seems to
me there are two primary possibilities, and maybe the answer
is both, but I want you to tell me. One
is actual risk or perception of risk in terms of
houses being damaged or destroyed, and the other is the
actual price of real estate and new construction going up.
(01:27):
So what are we looking at.
Speaker 2 (01:30):
Very're exactly right.
Speaker 3 (01:31):
It's a combination of these two factors.
Speaker 1 (01:33):
You know.
Speaker 3 (01:33):
One of the things we've seen is an uptick in
the number of really severe catastrophic storms that have done
mass damage. We're talking about these powerful thunderstorms, hailstorms, tornadoes,
and the other part of that, and of course wildfires
as well. And then the other part of that is
with inflation, the cost to repair or rebuild homes has
(01:55):
gone up too. So there's these are two factors that
are complicating each other and driving up the cost that
insurance companies have to pay out to settle these claims
and rebuild homes. And unfortunately, those costs gets passed on
to us as consumers in the form of higher home
insurance rates.
Speaker 1 (02:13):
We had a big blow up here in Colorado is
really a political thing a couple of years ago, because
in the immediate aftermath of COVID and zero interest rates
and all the helicopter money and all this stuff, real
estate prices just went crazy and the and it showed
(02:35):
up in property tax bills, right, and so in the
counties around Denver, for example, Douglas County of Very, a
major county just to the to the south of Denver,
their average increase in property tax assessments was forty percent
forty so this.
Speaker 2 (02:54):
Was a huge political thing.
Speaker 1 (02:55):
So as I see here in your data, seventy six
point six percent increase in home insurance rates. So that
forty percent was just over two years. There was plenty
of other years before that. What I'm getting at, and
taking much too long to do it, is how much
of this huge increase in home insurance cost do you
(03:16):
think is due to the price of real estate and
construction going up versus perception of increased risk here in
Colorado because we did also have that huge Marshall fire,
which was in a place that probably most people thought
there really couldn't be a big fire.
Speaker 3 (03:31):
Well, these things are tied together in the sense that
you know, when you look at the value of real
estate includes the value of land plus improvements like buildings
and stuff like that. When you look at insurance rates,
you know it's your insurance rate is based largely on
the cost the potential cost of rebuilding your home if
it's completely destroyed. That's that's what lenders require for a
(03:54):
loan to protect their financial interest and that's usually you know,
what insurance companies offer. So the price of land itself
doesn't affect your real estate. I'm sorry, it doesn't affect
your insurance rates so much. But in addition to land,
when you look at a lot of the new homes
that are going up, some of them are custom built homes.
They have more intricate features, they have more advanced features,
(04:17):
and so they're also more they're more expensive to rebuild.
And then the other thing is, you know, with the
potential risk we're talking about, uh, you know, I imagine
this in a lot of parts of the country, and
I believe this is true in several areas in Colorado
as well. You have homes going up in these urban
wild wildland interface areas and these are the most beautiful
(04:37):
places to live, but they also have the highest potential
fire risk. You know, with a with these areas, these
these urban interface areas, if there's a wildfire, it could
potentially take out several homes. You know, that's different than
a traditional house fire, like say something starts in your kitchen,
your garage, or something where that fire will take out
one home and the insurance company only has to pay
(04:59):
to re build one home with wildfires, insurance companies might
have to pay to rebuild twenty or thirty or fifty homes.
So that's also another increased you know, that's that's an
increased risk for them in terms of they're taking on
more risk because these areas have higher chances of being
exposed to a wildfire.
Speaker 1 (05:19):
So I'm a homeowner and these insurance rates are absolutely brutal,
and I look for everything I can do to try
to get my rates down.
Speaker 2 (05:28):
A couple of the.
Speaker 1 (05:28):
Things have been make sure I have a reasonably hail
resistant roof. Make sure when I lived up in the hills,
make sure that it didn't have trees too close to
the house, you know, for trying to prevent a fire
from getting too easily to the house. What are other
things that or or raising deductibles? What are other things
that our listeners that my listeners can can do to
(05:51):
try to reduce their home owners insurance premiums?
Speaker 2 (05:54):
And as part of that answer, maybe let me know.
Speaker 1 (05:58):
Whether whether they're there are large differences and prices from
one company to another.
Speaker 2 (06:03):
Right are you are.
Speaker 1 (06:04):
You likely to be able to find a much better
insurance deal by shopping around or are they all pretty close?
Speaker 3 (06:12):
You know, they're pretty close. We've seen differences of ten
to twenty percent by shopping around a couple one hundred
bucks a year. So it's it's something. It's it's it's
still painful. Yeah, I wish there were easy answers. I mean,
the things you mentioned are all good first steps in
terms of shopping around, choosing a higher deductible investing in
(06:35):
your home to make it better able to withstand the elements.
That includes hail resistant roofs, windproof windows, fire resistant materials
in the in the areas that are exposed to wildland fires,
and you know, the other thing. Another thing you could
do to avoid rate increases is just to avoid small claims,
like if you have a say, a broken window or
(06:57):
something that's only going to cost a couple of thousand dollar,
just pay for it yourself versus filing a claim. Insurance
companies get really jittery with clients who file claim, so
if you have one claim, your rates will go up.
If you have two claims, they might drop you. You know,
in the old days, people used to talk about five
hundred dollars deductibles, but you know that's five hundred dollars
just doesn't go as far as you used to. You know,
(07:19):
if you're you're talking about something that's going to cost
a few thousand dollars, maybe even three or four thousand
dollars in the long run, you might you might just
be better off paying for it yourself, you know, assuming
you have the resources to do that.
Speaker 2 (07:31):
Yeah.
Speaker 1 (07:31):
I mean, we we sold a house and then we
bought a house, so we're starting over with insurance. And
I noted that in that process of applying for insurance
on the new place, one of the questions was have
you ever filed a homeowner's insurance claim?
Speaker 2 (07:45):
And you know that you don't want to answer yes
to that.
Speaker 1 (07:48):
I mean, you have to answer truthfully, but you know
that you know you'll be much better off if the
answer is no. I'll give you the last seventeen seconds much.
Speaker 3 (07:56):
Better off the answer is no. And they actually they
can check. They'll run it at the last stage of
the process. Yeah, and so if something shows up that
you didn't initially, they have insurance company data. You know,
the insurance company databases can pull up those things, including
prior claim, so the don't find out eventually, it's just
a matter they don't. Sometimes they don't check until the
very end of the process, and then you might get
(08:17):
a surprise where the rate you saw on your quote
is going to be different lower than what they actually
want to charge you.
Speaker 1 (08:23):
Rob that is a lending Tree home insurance expert. He
joined us to talk about their new reports State of
Home Insurance twenty twenty five, which said that home insurance
rates rose a little bit over forty percent nationwide from
twenty nineteen to twenty twenty four, but rose nowhere faster
than in Colorado over seventy six percent. Right here, we've
(08:46):
all felt that pain. Rob, thanks so much for your time.
Speaker 3 (08:50):
I wish we could speak about a more pleasant subject,
but it's a pleasure and thank you.
Speaker 2 (08:55):
Glad to do it.
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