A provision in Colorado's new insurance bill creates a recurring cost for homeowner's insurers—and could reshape which carriers stay competitive in your market.
Most construction and trades owners in Colorado don't realize that a new state law includes a provision that will change how homeowner's insurance operates in the state starting in 2027. It's not about your coverage or rates directly—but it could affect which insurers remain active in Colorado and how they price their products.
Senate Bill 155, titled the "Increase Access Homeowner's Insurance Enterprise," became law on August 12, 2026 (assuming no referendum petition was filed). Buried in the bill is a fee requirement that most people haven't heard about.
Starting in calendar year 2027, every admitted insurer offering multiperil homeowner's insurance in Colorado must pay an annual fee equal to 0.5% of the premiums they collected in the prior year. This is found in Section 10-4-2003(4)(a) on Page 10 of the bill.
Here's the critical part: insurers are explicitly prohibited from passing this fee to policyholders as a surcharge. That means the cost is absorbed entirely by the insurance company.
If you're a general contractor, subcontractor, or trades business owner, you don't pay this fee directly. But you should understand what it means for the insurance market you operate in.
For larger national insurers, a 0.5% annual fee on premiums is a line-item cost they can absorb or factor into their overall strategy. For smaller regional or specialty insurers—the ones that often compete aggressively on price or serve niche markets—this becomes a real, recurring operating cost obligation with no way to recover it through customer surcharges.
Over time, this could mean:
Fewer carriers in the market. Smaller insurers may decide Colorado is no longer profitable enough to serve, reducing competition and potentially limiting options for homeowners seeking coverage.
Consolidation around larger players. The fee creates a structural advantage for large national insurers that can spread the cost across millions of policyholders.
Indirect effects on your business. If your clients have fewer insurance options or face higher premiums due to reduced competition, it can affect their ability to finance or close construction projects.
The bill takes effect August 12, 2026. The actual fee collection begins in calendar year 2027, based on premiums collected in 2026.
This gives insurers roughly six months to understand their 2026 premium totals and prepare for the first fee payment due in 2027.
If you're involved in residential construction or work closely with homebuilders, it's worth monitoring how Colorado's insurance market responds over the next 18 months. Changes in carrier participation or pricing could ripple through your supply chain or project financing.
For a more detailed, business-specific breakdown of SB155 and how it affects construction and trades operations in Colorado, a free resource is available.
Source: Colorado SB155, Section 10-4-2003(4)(a), Page 10; effective date August 12, 2026.