Insurers in Colorado have the financial strength to absorb the losses they face as another severe wildfire season gets underway in the state, industry representatives say.
But the more immediate question, consumer advocates say, is whether they will want to keep covering vulnerable mountain communities.
More than 200 carriers compete to provide homeowner's coverage in the state, said Carole Walker, executive director of the Rocky Mountain Insurance Information Association.
There are no indications that they are cutting their losses and leaving Colorado as they have in other disaster-prone states such as Florida and Texas, where costs got too high.
"I have not heard of any larger carriers pulling out," Walker said.
"It is still a very competitive homeowner's insurance market," added Vince Plymell, a spokesman with the Colorado Division of Insurance.
One measure of the stress on insurers is the loss ratio, or how much they pay out in claims versus how much they collect in premiums.
In Colorado, insurers paid out $1.20 in claims for every $1 in premiums collected last year versus 60.6 cents nationally, said Kelly Campbell, vice president of state government relations in Colorado with the Property Casualty Insurers Association of America.
Heavy claim years such as 2012 normally balance out against lower claim years like 2011, when insurers paid out 72 cents for every $1 in premium in Colorado.
If they don't, then premiums rise. The insurance premium for Colorado homeowners averaged $926 last year, Campbell said, only slightly higher than the national average of $909.
But premiums here are significantly higher than neighboring states such as Utah at $558 and Wyoming at $748.
Consumer advocates say they are watching whether insurers will start to redline or exclude mountain communities from coverage.
"The pattern after past wildfires is that the more severe the event, the more of a panic it sets off among insurers and the more people who don't get renewed," said Amy Bach, executive director of United Policyholders, a consumer advocacy group.
Bach said her nonprofit group initially hadn't heard many complaints about nonrenewal from Colorado residents, although that has changed in recent weeks.
"I am concerned about what the future may hold for homeowners in the mountain areas," she said.
Bach urges homeowners who don't get renewed to avoid panic and to search for a replacement. So far, it appears other insurers are filling the gap.
Regulators said they aren't concerned that mountain communities are being excluded based on geography.
Insurers do have the right to price policies to reflect increased risks, and they can adjust underwriting criteria, such as requiring homes to be within so many miles of a fire station, Campbell said. The key is that underwriting criteria must be applied uniformly, she said.