Full Video Transcript

Full transcript from this video, organized by chapter. Click any timestamp to jump to that moment in the video.

Hail Damage Impact

[0:00] Hail is one part of the equation of why a lot of people can no longer afford to be in Colorado, specifically kind of the Denver metro area here, because we are known as the hail capital of the world. And what you're seeing right now is not uncommon. This happens a couple of times a year all throughout the entire front range. I've been stuck in hail storms all over this beautiful state. I've only experienced hail personally up to about golf ball size, which was scary. Really scary. We're talking a couple years ago, we had softballs size hail, bigger than your fist coming down. I couldn't imagine being caught in that, but we're going to talk about lots of stuff insurance-wise today and why it's really stressing out homeowners in Colorado and forcing quite a bit of them to actually sell and get out. So, this chart here is showing you just how much damage happens because of these hail storms. And I mean, we have a ton of these storms that are a couple hundred million dollar worth. And then we've been getting some monsters lately. And in 2017, this one, gosh, I'll remember it for the rest of my life. Over $2.2 billion worth of damages. I mean, I remember the mall and the west side of town there. The entire roof caved in. I mean, you're talking this is pretty scary stuff when you're caught out in it. You know, in your car, it's not uncommon for windows to be shattered, cars to be completely totaled. Every panel look like someone took a hammer to every single uh panel on your car. And it's just increasingly getting worse as we're having kind of some crazier storms. And then what happens is actually we're looking at a roofing website here is all these stormchasing roofing companies. I mean I can't tell you how many times a week I get my door knocked on. I work from home most of the time. Uh and so I'm home in the middle of the day and I get people chasing the storms around days after we get a hail stom wanting to check on our roof, you know. And what it's done is that, you know, roofs are not cheap. You know, you end up spending between $7 to $20,000 on average uh for most of your roofs. And 7,000 is a very small home.

[2:02] You're talking 1,000 square feet or less. And you know, these chasers come around and they tell you, hey, well, it's only going to cost you,000 bucks, 1,500 bucks in your deductible for getting your roof replaced and you'll be fine until the next storm. I mean, if you only have a roof that's 2 or 3 years old, uh, you know, we have such a rapid rate of replacement here in this state, it actually really bothers me. I mean, my last roof was almost 30 years old. We didn't have this fancy level four, level five impact resistant roof. We just had a regular roof. My god, there were two layers of roof on there because when we bought it, there was just a second layer. We just left the darn thing and we were fine for 30 years approximately.

[2:43] no leaks, no issues, no shingles flying off, whatever. But when someone gives you the opportunity to replace your roof because it's got hail marks on it, uh this this has kind of caught up with us. You know, all these claims that have been made, I mean, my insurance personally on my own house has gone up by more than 100%. In the last 5 years now, part of that is kind of the co inflation thing that happened. Uh, but you know, I've had so many clients getting quotes at 12, 15, $20,000 a year, depending where you are, especially if you're in the foothills where you will get hail as well as the potential fire damage, like it is creating this perfect storm of crazy rates, insurers leaving the state, and then as our population ages too, as we have more boomers on fixed incomes, you know, my my mortgage payment between taxes and insurance has gone up by, you know, 20 25% over the last 5 years without my mortgage rate. We didn't refi or anything like that. It's just because of property taxes, which our rates didn't increase, but the uh values increased, so we're paying more in taxes. Uh and then the insurance has doubled. Uh you know, that added quite a bit. Now, we have a very cheap mortgage, so that's great and that's been awesome for us. But if you don't, you know, or if you're on a fixed income, you know, another 3 4 $500 a month over the course of 5, 10 years, could make a big difference. Homeowners insurance is literally going to be the death of real estate. I'm just telling you right now, homeowners insurance is out of control.

Insurance Costs Rising

[4:16] There has to be some way to regulate or mandate that because they are predicting that homeowners insurance is going to go up 8% yearover-year. Do you have the ability to pay your homeowners insurance if it goes up 8%. Like that's a [ __ ] ton of money. Like I'm thinking about on my own policy. My policy is $7,500 a year. I even had a claim. I don't really live in like a fancy ass house, y'all. Like $7,500 a year is a ton of money.

[4:45] All right. I love Linda. Uh props to her. She is very real. And she's absolutely right. And when she's saying 8%, I think that's pretty conservative. you know, she's based out of Texas, I believe, uh, not Colorado, but this is a problem affecting everywhere. If you're in Florida right now, trying to get a homeowners insurance policy can be next to impossible. I got buddies in San Diego, California, that are only on state approved plans. I didn't even know that was a thing because all the other insurance carriers have virtually left the market. Uh, and so this could be kind of the canary in the coal mine for a lot of states out there not being able to get homeowners insurance. Colorado Governor Jared Polus wants legislators at the state capital to tackle homeowners insurance problems.

State Policy Solutions

[5:30] Colorado is at a tipping point. Carol Walker is the executive director of the Rocky Mountain Insurance Information Association. They try to help the public understand insurance. She doesn't think the historic fires in California will have a direct impact on premiums and availability in Colorado, but she believes if lawmakers implement certain policies, it could. In California, some of what's added to their insurance crisis with pushed companies out of California is they've suppressed rates.

[6:00] In California, seven of the top 12 insurance carriers either cut existing homeowners policies or stop selling new ones. And thanks to the leadership of Speaker McCcluskey and Governor Polus didn't directly mention suppressing rates Thursday. In fact, he had ideas for ways to hopefully lower rates and looking at risk reduction efforts that can directly translate to lower costs. And I know many states that are starting to get the politicians involved heavily on this because it is becoming such a massive problem all across the board.

[6:30] We did have one company drop us. Almost every conversation that we have with people up here, insurance comes up. We are in the most challenging property insurance market that we've seen in a generation. When our insurance renewed this year, it went up about 2,000. That was a big hit. There's more risk of natural disasters caused by climate change, and it's time to take the actions that we need to in 2026. So far, you know, going into this year, I do worry about our upcoming fire season. You know, we have had historically low moisture over December, January, and so far into February. I mean, the ski resorts aren't even fully open. I mean, they're probably 50 60% open right now, which is unbelievable.

Weather & Market Conditions

[7:14] In the 25 or so years that I've lived here, uh, this is the least amount of snow that I've ever seen. And we're in the 60s. Like, it's February right now and we are 60° every single day for the next 10day forecast. Like, this is pretty unbelievable. And nobody's really used to it. So, little bit of fear happening here for the upcoming fire season. Now, I know we're talking about doom and gloom, but we are still an extremely attractive state to move to for a lot of reasons for people from California, Texas, Florida, the Midwest, upper east coast. Like, our cost of living is not out of control in comparison to a lot of places out there.

[7:51] Yet, our quality of life is so extremely high. And if you are thinking of navigating here, like feel free reach out. Here's my phone. uh call me, text me, or you can download my relocation buyers guide, which is going to answer a ton of questions that you have in case you're not ready to talk yet. Tell me what is going on with insurance right now. The market is crazy right now. We're seeing restrictions galore, carriers dropping terrible news bombs on us left and right, and a lot of it has to do with just the amounts of losses that they've taken over the last couple of years. Uh you know, it all kind of kickstarted locally here in Colorado with the Marshall fire 2020. thousand homes in the suburbs of all places just vanished. So that really started kicking everything off. You know, we had just come out of COVID, so CO inflation stacked on with that just caused for the perfect terrible storm for insurance restrictions. Um that coupled with uh one of the larger hail losses we've had last year has just caused insurance rates to climb astronomically. I mean, we're seeing carriers take 50 to 100% rate rate increases consecutive years, but people are starting to really feel that pinch, especially when you're combining that with property taxes going up.

Fire Loss History

[8:55] Yeah, that Marshall fire was really bad. Uh, it was a really sad thing. And that actually happened on the flatlands here. Like, we're used to fires happening up in the mountains, right up in the foothills, uh, further away. We've actually got close friends of our that manage a lot of the forest, uh, districts around, uh, the Front Range. And so we know firsthand like all the fires that are happening and lots more happen than will ever make the news, but they stay really small uh because we have really good uh fire departments and suppression here. But that Marshall fire got out of control way fast. And it was in Lewisville um and about a thousand homes burned that were valued between 900 to like 1.5 million. So it was not cheap, very expensive. I think it was the costliest fire in Colorado's history. Uh, and it was started on the grasses just to the east of the foothills there and something got out of control and we were having like 60 to 80 mph gusts that day. So, it was a perfect storm yet again to kind of add to this insurance nightmare. So, we've got the hail, we've got the inflation that has happened and we've had some kind of historic fires as of late. Um, all making this just worse for people trying to get homeowners insurance here. If you live in a condo or a town home and your insurance agent hasn't talked to you about this kind of coverage, perhaps it's time to have a conversation with you.

[10:16] Listen up, folks. We're talking about loss assessment coverage. And what prompted this conversation was a story we did here on 9 News last night about a guy in Green Valley Ranch who got an $8,300 bill from his HOA for a special assessment for a deductible they had to pay for roof repair. We've told you for about a year now that HOAs are having a really hard time getting insurance policy because insurance companies are moving out of the HOA insurance game. It's too big of a liability. They don't want to pay for it anymore. And that makes the remaining insurance companies in the market more expensive and they have special terms tied to them like these high deductibles on hail and wind damage claims to roofs.

HOA Assessment Issues

[10:54] But most condo policies come with this loss assessment coverage. It's a small amount of money that you pay, but the insurance company would then pay the special assessment for you should something pop up like a roof repair or some other kind of emergency. I get a lot of emails about people who have skyrocketing special assessments, and I'm always blown away by how many of them don't have this kind of coverage.

[11:16] So, maybe use this story as an opportunity to look at your own policy and see if you're covered in the event that your HOA needs a whole lot of money. And so it's not just limited to single family homes that are seeing this pinchion insurance. You know, with condo buildings and our infrastructure and the building aging, right? We had huge booms in the '9s of building and now a lot of these buildings are getting to be 30-ish years old, which, you know, if you're in a high-rise building, right, that might need mean new roof, new HVAC systems, new water lines, new plumbing, drain lines, new windows throughout. And if you're in kind of a town home community, this could mean new roofs, new siding, uh you know, asphalt repaving. And so we've already seen HOA uh monthly assessments go up, right? Paying anywhere under $300 a month right now is actually really cheap for most HOAs throughout the country. Now, yes, you can get amenities for this, that, and the other thing. I get that. We're just talking about the maintenance of the structures here, right? exterior maintenance and uh roofs and kind of the the general grounds. Um, and when you have an entire roof getting replaced on a on an association that has maybe a hundred units on it, right? And you might be spending $250,000. So, if the HOA doesn't have reserves saved up, then each unit is going to get what they call a special assessment, which is exactly what this guy is talking about, where, you know, each unit now has a $2,500 bill hanging over their head. Well, if you're in a building that you know are more inexpensive condos, maybe that's why you bought in the first place. Now, people are struggling making their payments on everything else because prices have gone up and then you're slapped with another $2,500 assessment on top of that. Well, what happens is the HOA votes on making goofy decisions.

[13:05] I've actually had this recently with several clients lately. So, to get a loan for a condo, let's say it's a $300,000 condo here in Denver, and yes, there are plenty of them to pick from. Why? because a lot of them are starting to struggle is they have insurance deductibles and what Fanny and Freddy are looking for is a 5% uh insurance deductible on the master policy for the HOA. Well, that's expensive. And so if the HOA votes to increase that to 10%, now the only loan available for a new buyer is going to be something where you have to put down at least 20% instead of having a 5% standard down payment. Who buying a $300,000 condo has 60 grand just sitting aside right now? They really don't. If you did, you're probably looking at a single family home or something more expens more expensive where uh the HOA is in better condition uh and just has better shape in general.

Condo Insurance Challenges

[13:58] So, it's really a tricky nuance here. You know, Florida has got some of the worst HOA nightmare insurance situations in the entire country right now, but most states are not far behind and this is becoming a rampant issue out there. Uh, so I just wanted you all to know this stuff, to know what you're on the lookout for, but I can absolutely help you navigate through this with insurance challenges. I go through it once a week at least on helping people navigate through this stuff. But feel free, call me, text me, reach out, um, or download my relocation guide. It talks about insurance on there and the different areas and kind of what to look out for.

[14:33] Now, beyond just the insurance issues, if you are looking here in Denver, I put together this video for you which talks about the houses that you should absolutely 100% stay away