As metro areas expand in hail-prone areas, the entire state sees rising costs, putting pressure on current home owners and creating barriers for those in the market

Erick Perez, 32, bought his home in Rifle, Colorado in 2023. Insuring the sprawling property cost him less than $100 a month through Liberty Mutual in 2024. By last year, however, the premium had jumped to nearly $150. And when Perez went to pay his monthly bill last month, what he saw shocked him: His premium had risen to $207.75.

“It’s terrible,” said Perez. “I don’t particularly follow up and just make those monthly payments but now looking at it, it’s more than doubled since I bought the house.” 

Colorado, like California and other states, has been hit hard by wildfires in recent years. But what is driving up the cost of insurance for homeowners like Perez isn’t the threat of fire. It is hail.

According to Colorado State’s Department of Regulatory Services, hail accounts for 26 to 54% of the average total home insurance premium whereas wildfires only account for 0.9 to 24.6%. In places like Denver which is along the Fort Range and in what is known as “Hail Alley,” premiums can be as high as $3,040 annually, with around 50% being the hail portion of the premium.

Across the country, soaring insurance costs are contributing to a broader housing affordability crisis that is especially acute for young Americans. The age of signing a new mortgage rose to 40 in late 2025, and the median sales price of houses sold tops $400,000. 

Colorado has been among the hardest hit by the affordability crisis. It was the 4th most expensive state to buy a home in 2025, according to the online brokerage Redfin, behind only California, Hawaii and Massachusetts. Working class families in the state are increasingly priced out, especially following the post-pandemic population boom driven by low mortgage rates — rates that are no longer available to new buyers. Increasingly, insurance premiums are now another obstacle, as intense hailstorms drive up premiums year after year.

Colorado also consistently ranks in the top 10 in the country for most hail claims, with $521 million payouts from State Farm in 2024. Insurers also have been losing money in Colorado in 8 of the past 11 years, and has seen a rise in national disasters since the 1980s.

The increase in hail damage is partly the result of the state’s population growth. As the metro area expands, hailstorms that may have hit open fields in the 1990’s are hitting roofs of houses, said Jeff Bass is an insurance broker in the area, which sees the most damage from hailstorms in the states.

“The storm losses have been more frequent along with the rising cost of roofing and labor,” said Bass.

But there is also another factor making it worse: climate change. 

While hail has been a part of Colorado’s climate for decades, increasing temperatures from climate change allows the hail to form in the upper atmosphere for longer and become larger. These large masses damage roof shingles, which are often only designed to withstand 2-inch hail at most. Hail intensity and frequency has increased across the Front Range of Colorado, which includes Denver and Colorado Springs. 

“It’s the perfect environment,” said Chris Tomer, who served Colorado for 25 years as a meteorologist. “Tall mountains, a big drop in elevation into Denver and Colorado Springs, consistent afternoon variables such as wind direction, dry lines, colder air aloft, and climate change.”

Colorado’s most costly hailstorm happened on May 8, 2017 in Denver, causing $3.09 billion in damage in 2026 dollars. Such disasters feed into the models used by insurers to assess risk, leading to higher premiums. That risk assessment is unlikely to improve in coming years, especially since the cost of labor and materials has risen alongside the intensity of storms. 

Roofing companies seem to be one of the only winners in the hailstorm crisis in Colorado. Edgar Moreno has owned A+ Roofing and Exteriors in Denver, Colorado for 10 years, replacing shingles destroyed by hail. Even though there hasn’t been hail yet this season, he is still completing repairs for claims made during last year’s hailstorm. To repair a full roof the cost is, on average, between $16,000 and $19,000. 

He is preparing for this season, making sure suppliers have enough shingles and that all of the salespeople are ready for the season.

“We are getting ready for the next hailstorm which may come in May or June,” said Moreno. 

The number of homes going uninsured is increasing as premiums become unaffordable and insurers pull out of high-risk markets. Of the 86.6 million owner-occupied homes in the U.S.  12.2 million are uninsured, according to a report by LendingTree that analyzed U.S. Census Bureau 2024 American Community Survey (ACS) numbers. The high cost puts yet more affordability pressure on homeowners and locks out potential homebuyers from securing a mortgage if they are unable to find coverage. 

Matthew Damon, real estate agent with Cornerstone Real Estate Company, helps his buyers find insurance so that they can qualify for a mortgage. When signing a mortgage contract, insurance eligibility has become one of the deadlines he has had to pay more attention to compared to previous years. Even for his own property, he decided to change insurance providers because the price doubled.

“We pay the cost of the premium even though we don’t get the hail damage,” said Damon, who serves a less hail-prone area.

In some states, insurers are pulling out because they can’t provide affordable insurance. Colorado is trying to avoid that by getting involved in the private market by providing state-level insurance and also subsidies for people to make their roofs more hail resistant. But insurers are still cutting back coverage, and experts worry some of these companies wouldn’t survive a serious disaster.

“Either insurance becomes unaffordable or insurance becomes unavailable,” said Parinitha Sastry, Assistant Professor of Finance, Wharton, University of Pennsylvania.

Colorado is trying to avoid the fate of states like California, where damage from the Palisades and Eaton wildfires last year caused insurance companies to pay out $22.4 billion in December 2025. The result? Consistent rate increases that force families to either go uninsured or move to a state plan. 

This was the reality for Sara Jennings, whose home in Pasadena, California whose home was first dropped by Liberty Mutual in 2024. The only place that would insure her home for fire was the state California FAIR plan. But her plan jumped from $1000 per year to $3000 after the Eaton fire in 2025.

“It just means we have less money every month as expenses keep going up,” said Jennings.

It’s a fear that homeowners in Colorado have as hailstorms worsen year over year. But Denver isn’t there yet, as insurance companies hold on despite losses.

“If you look across the nation the frequency of storms and the severity of damage is up which is impacting all insurance companies,” said Bass.