Colorado's early and deadly wildfire season is already reshaping the state's property insurance market, with brokers warning that a market which had begun to soften is hardening again as carriers retreat from wildfire-exposed risk.
At least one broker has warned some carriers are no longer binding new policies within 20 or 50 miles of an active fire. This constraint now biting across southern and central Colorado as multiple major blazes burn, one of them already the eighth-largest in state history.
"We're definitely seeing underwriting guidelines and carrier appetite become more restrictive," said Malcolm Jeffris (pictured), a Denver-based broker at Burns & Wilcox. "I think a lot of people in the MGA and wholesale space would say the market had started to soften a little this year. But with the wildfires picking back up, I would expect tighter underwriting guidelines and more difficulty placing wildfire-exposed risks."
Large wildfires burning across Colorado and neighboring Utah have prompted evacuations, air quality alerts and renewed concern about drought-driven fire conditions.
The Aspen Acres Fire southwest of Pueblo, now the eighth-largest wildfire in Colorado history, had grown beyond 86,000 acres as of Sunday. The Ferris Fire near Dolores, the Gold Mountain Fire near Ouray and the Willow Fire west of Leadville continued to challenge firefighters amid high winds, record-low fuel moisture and difficult weather conditions.
At least three firefighters have been killed battling the Snyder Fire on the Colorado-Utah border.
According to Jeffris, the fires themselves are not unprecedented, but the speed at which they are spreading is notable, as is how close the blazes are burning to popular mountain towns such as Ouray and Leadville. He said many Colorado residents had anticipated a more severe season following a winter with below-normal snowfall.
"We've been fortunate over the last two years not to have super bad fire seasons," he told Insurance Business. "But I'd be lying if I said people weren't talking about how this year had the potential to be a bad one because of the lack of snowfall over the last four or five months of winter."
The broader industry has already absorbed the financial weight of escalating wildfire losses. Swiss Re estimates natural catastrophes generated $107 billion in insured losses globally during 2025, with wildfires alone accounting for a record $40 billion; the bulk of it from the January 2025 Palisades and Eaton fires in Los Angeles, the costliest wildfire event on record.
The reinsurer describes wildfire as the fastest-growing natural-catastrophe risk, with insured losses climbing an estimated 12% a year, and says North American wildfire losses in particular are rising roughly twice as fast as exposure growth alone would predict. This reflects both expanding development in fire-prone areas and worsening hazard conditions.
Jeffris said Colorado's commercial property market had shown signs of improving after two relatively moderate wildfire seasons. However, carrier moratoriums are creating immediate placement challenges.
"When I started here four years ago, it was extremely difficult to get insurance for larger condo associations or habitational risks in places like Steamboat, outside Aspen, or Crested Butte," he said. "Over the last couple of seasons, because wildfire activity wasn't as severe, we'd been able to obtain full limits. Now we're starting to see that become more restricted again."
The exposure driving wildfire losses is not limited to burned buildings. Many commercial insureds face significant secondary costs due to business interruption, that are becoming increasingly important as wildfire seasons lengthen and communities face repeated evacuation orders.
"A lot of our clients run recreational tour-based businesses, or they're managing apartment complexes where people have to evacuate, meaning they can't collect rent for those months,” Jeffris said.
Rather than withdrawing entirely, many insurers are changing how they manage wildfire exposure. Jeffris said percentage-based wildfire deductibles are becoming increasingly common, particularly for larger habitational risks.
"Historically, wildfire deductibles weren't separated out, but we're increasingly seeing standalone wildfire deductibles, either as flat deductibles — sometimes as high as $250,000 for large associations — or percentage-based deductibles."
At the same time, brokers are also seeing more accounts pair traditional coverage with alternative risk transfer. Colorado's recently established FAIR Plan is providing an option for properties that struggle to obtain private-market coverage, with insureds pairing basic FAIR Plan protection with wraparound policies to restore broader coverage.
As underwriting becomes more selective, documented mitigation efforts are increasingly influencing pricing and capacity decisions. Jeffris said defensible space remains the single most important measure.
"One association in the Durango area had an agreement with a contractor who would immediately come out during a nearby wildfire to water down the area and clear combustible brush," he said.
In that case, the investment translated directly into insurance savings — an answer, Jeffris suggested, to precisely the tightening now confronting wildfire-exposed accounts.
"By documenting their brush-clearing contracts and their wildfire response plan with a contractor, they were able to earn credits on their existing policy," he said. "I think that's a useful strategy for associations. They should document the work they're doing and use it to negotiate some premium relief."
