Two Things Changed, and Most Homeowners Only Know About One
If you own property in San Miguel County and your carrier has non-renewed you, or quoted you a number that reads like a polite refusal, you have probably heard the phrase "FAIR Plan." Fewer homeowners know that a second change landed this summer, and it may matter more: as of July 1, 2026, Colorado insurers owe you a written, specific explanation of your wildfire risk score and what mitigation work would do to it — and if they do not build mitigation into their models, they must give you a discount for doing the work.
This article covers both, and the order matters. The mitigation rules are the ones you use to *stay* in the standard market. The FAIR Plan is where you go when that fails.
What the Colorado FAIR Plan Is
The FAIR Plan (Fair Access to Insurance Requirements) was created by HB23-1288, signed May 12, 2023, and codified at C.R.S. §§ 10-4-1801 et seq. It began writing residential policies on April 10, 2025 and commercial policies on June 17, 2025.
It is a stand-alone nonprofit funded by assessments on admitted insurance carriers — not by public money. It is an insurer of last resort, which is exactly what it sounds like: it exists so that property which cannot get coverage in the standard market is not left with nothing.
What the FAIR Plan Actually Covers — and the Four Things That Will Surprise You
This is where homeowners get caught, so read this section carefully.
Limits. Residential coverage is capped at $750,000 combined property and contents. Commercial is capped at $5,000,000 combined commercial property and business personal property. In a market where many Telluride-area homes exceed the residential cap outright, that ceiling is the first hard constraint.
It pays actual cash value, not replacement cost. The FAIR Plan settles at replacement cost less depreciation. This is a fundamentally different product from the homeowners policy you are used to. On an older mountain home, the depreciation gap between ACV and what it costs to rebuild is not a rounding error.
The peril list is narrow. Basic coverage is fire, lightning, and smoke. Optional limited extended coverages are available for windstorm or hail; explosion, riot or civil commotion; vehicles; volcanic eruption; and vandalism and malicious mischief. That is the list.
The exclusions include things you will badly want. The FAIR Plan excludes Ordinance or Law, Earth Movement, Water Damage, Power Failure, Neglect, War, Nuclear Hazard, Intentional Loss, and Government Action.
Two of those deserve to be said out loud for a Telluride owner:
- No Ordinance or Law coverage. If your home is in the National Historic Landmark District, or simply predates current code, the extra cost of rebuilding to today's requirements is not covered. That is the single largest gap in the product for this market.
- No Water Damage coverage. In a climate where the dominant non-fire claim is a burst pipe in a house nobody was standing in, that exclusion removes the peril most likely to actually hit you.
The FAIR Plan is not a homeowners policy. It is fire coverage with a few options bolted on. Which is why the next point matters.
Do Not Stop at the FAIR Plan — Ask About a DIC Policy
Because the FAIR Plan's peril list is so narrow, the standard structure is to pair it with a difference in conditions (DIC) policy purchased through a producer. A DIC sits alongside the FAIR Plan and fills what it does not cover — typically liability, theft, water damage, and the broader perils a homeowners policy would have handled.
A FAIR Plan policy standing alone leaves a homeowner with no liability coverage at all. If you have been placed in the FAIR Plan and nobody has raised DIC with you, that is the question to ask this week.
Am I Eligible, and How Do I Apply?
Eligibility requires that the property be genuinely uninsurable in the standard market, evidenced by proof of three declinations. You cannot apply directly as a consumer: under C.R.S. § 10-4-1808, applications go through a licensed producer registered with the FAIR Plan.
Rates are subject to the normal filing and review process — they must be actuarially sound and not excessive, inadequate, or unfairly discriminatory.
The Part Most Homeowners Have Not Heard About: HB25-1182
Signed May 28, 2025 and effective July 1, 2026 for policies issued or renewed on or after that date, HB25-1182 (codified at C.R.S. § 10-4-124) changed the rules for every insurer using a wildfire risk model or score in Colorado — including the FAIR Plan itself (§ 10-4-124(9)). It applies to homeowners policies, residential condominium unit policies, and multifamily residential housing.
Here is what it gives you.
A discount, or an explanation. An insurer using a wildfire catastrophe model must ensure that property-specific mitigation (defensible space, home hardening, certification) and community-level mitigation are either built into the model or demonstrably included in its underwriting and pricing. If the insurer does not incorporate those actions into its models, it must provide discounts to policyholders who demonstrate them (§ 10-4-124(4)).
Published discount amounts. Insurers must post on their public website which mitigation actions earn a discount, the amount of each, and the process for appealing a wildfire score (§ 10-4-124(5)). This is the citable, non-speculative way to find out what your carrier actually pays for mitigation — go to their site and read it, rather than trusting a number from a blog.
An annual written notice. If an insurer gives a mitigation discount, or uses a wildfire score to underwrite, price, surcharge, create a rate differential, or non-renew, it must give you an annual written notice containing: a plain-language explanation of the score; the range of possible scores; your property's relative position in that range; a written explanation of why your property scored as it did, identifying the primary features that drove it; and the impact each mitigation action could have on your score (§ 10-4-124(6)).
Timing is specified: applicants get it within 15 days of a completed application; policyholders get it in the renewal offer; non-renewed policyholders get the score with the non-renewal notice (§ 10-4-124(7)). After you complete mitigation work, you can request a revised score and the insurer must produce one within 30 days.
A real appeal right. You may appeal the score, classification, or discount to the insurer. It must acknowledge in writing within 10 calendar days and deliver a reconsideration and decision within 30 calendar days (§ 10-4-124(8)). Denied appeals must be forwarded to the Commissioner on request.
If you have been told "that's just what the model says," that answer is no longer sufficient. You are entitled to know which features drove the score and what would move it.
What Mitigation Legally Counts
C.R.S. § 10-4-124(1)(c) defines a "property-specific mitigation action" as a science-based action as demonstrated by the Wildfire Prepared Home designation from the Insurance Institute for Business and Home Safety (IBHS), or by a similar program that includes a verification and certification process.
That statutory name-check matters. IBHS's Wildfire Prepared Home is available in Colorado. Its Base level targets wind-blown embers and requires a noncombustible 0–5 ft zone, defensible space from 5–30 ft, a noncombustible roof, ember-resistant vents and openings, a minimum six inches of noncombustible siding at ground level, and deck standards. Plus adds protection from flames and radiant heat. Designation lasts three years with annual photo-based maintenance verification, and there is a $125 nonrefundable application fee.
The operative phrase in the statute is "verification and certification process." Work you did yourself, undocumented, is harder to claim credit for than work that produced a certificate. Document everything, dated, with photographs.
One honest caveat: IBHS itself states that insurance discounts are not guaranteed and vary by insurer and state, and its own incentives listing does not currently show Colorado carrier discounts. The enforceable path in Colorado is the one above — the insurer's own posted discount schedule under § 10-4-124(5), and your appeal right under § 10-4-124(8).
Your Protections If a Carrier Non-Renews
Sixty days' notice, with reasons. Under C.R.S. § 10-4-110.7(3) an insurer cannot cancel or refuse to renew a homeowners policy without mailing first-class notice at least 60 days in advance, specifically stating the reasons. Nonpayment of premium is 10 days. If claims experience drove the decision, the insurer must disclose the specific claim information that caused it.
Wildfire disaster areas get more. Under C.R.S. § 10-4-110.9, for property in a federally designated wildfire disaster area, an insurer may not refuse to issue a fire policy based on zip code, county, or distance from a wildfire — and may not refuse to renew an existing fire policy in such an area for any reason related to wildfire, though it may require reasonable risk-reduction actions as a renewal condition.
Sixty days is not long, but it is enough to work with if you start on day one rather than day fifty.
There Is Also a Tax Credit — With Real Limits
Colorado's wildfire mitigation income tax credit (C.R.S. § 39-22-543) currently allows 25% of up to $2,500 in costs, a maximum credit of $625, nonrefundable, and limited to taxpayers with federal taxable income at or below $120,000. HB26-1289 changes it beginning in tax year 2027: refundable, income limit raised to $300,000 AGI, and maximum credit raised to $2,000. The credit is scheduled to repeal January 1, 2031.
Two things to note. Home hardening — a fire-resistant roof, for example — is not an eligible expense under the credit as written; it is aimed at vegetation mitigation. And for scale, the Colorado State Forest Service data cited in the state auditor's 2026 evaluation puts a one-acre defensible-space project around a home at roughly $3,200 to $6,100 — which is why a $625 credit is a contribution, not a solution.
A Sequence That Actually Works
1. Do not wait for the non-renewal. Read your renewal notice for a wildfire score the moment it arrives. 2. Read your insurer's posted mitigation discount page. It is required to exist and to state amounts. 3. Do the mitigation, and document it — dated photographs, invoices, and a certification with a verification process where you can get one. 4. Request a revised score. They have 30 days. 5. Appeal if the score is wrong. Ten days to acknowledge, 30 to decide. 6. Shop the standard and surplus lines markets thoroughly before concluding you need the FAIR Plan. Three declinations is the entry requirement, not the goal. 7. If you land in the FAIR Plan, pair it with a DIC policy and understand you are holding ACV coverage with no Ordinance or Law and no Water Damage.
The Bottom Line
The FAIR Plan is a genuine safety net and a meaningfully better outcome than being uninsured. It is also a narrow, actual-cash-value fire policy with a $750,000 residential ceiling and exclusions that land hard on exactly the kind of older, high-value, historic-district property this county is full of. It should be the destination you arrive at after exhausting the market, not the first stop.
The mitigation rules that took effect this July are the more useful tool for most owners, and almost nobody is using them. You have a right to know your score, why you got it, and what would change it — in writing, on a clock.
Request a wildfire coverage review online, or call 844-967-5247, and we will look at your current renewal notice, your risk score, and whether the standard market has genuinely been exhausted before anyone talks about the FAIR Plan.