The new law, which takes effect July 1, 2026, applies to homeowners and condo policies – including those written by admitted carriers and the Colorado FAIR Plan – and introduces strict requirements for disclosing how wildfire risk impacts premiums, recognizing mitigation efforts, issuing annual risk score notifications to policyholders, and offering a formal appeals process for disputed scores.
To help carriers navigate these changes, ZestyAI is leveraging its explainable AI models and mitigation-ready data platform, which is already used by leading insurers and the Colorado FAIR Plan. Bryan Rehor, Head of Regulatory Affairs at ZestyAI, explained that the company’s technology was developed with transparency and regulatory alignment in mind: “As regulatory expectations around transparency and customer engagement continue to evolve, HB 1182 sets a clear framework for wildfire risk modeling. ZestyAI’s models were built with these principles in mind, offering carriers a proven, low-friction way to meet these requirements while delivering a better experience to policyholders.”
ZestyAI’s platform enables insurers to clearly communicate how risk scores are generated, what factors are considered, and how both property-level and community-level mitigation actions influence risk ratings and premium discounts. This capability allows carriers to proactively integrate mitigation data into underwriting and pricing decisions, ensuring that discounts are applied appropriately and that policyholders understand the value of risk reduction.
The platform also supports automated generation of consumer disclosures, giving insurers the tools to deliver individualized risk scores and mitigation insights as part of annual notifications. Additionally, ZestyAI enables real-time score adjustments based on updated property information, providing a streamlined and transparent appeals process for consumers who challenge their ratings.
Carriers using ZestyAI’s wildfire, hail, wind, and severe storm models benefit from tools that have already been reviewed and approved for use by the Colorado Division of Insurance. This ensures that insurers can move forward with confidence, knowing their models are fully aligned with regulatory expectations. Furthermore, ZestyAI’s multi-state scalability means the same platform can be used to comply with similar emerging regulations in other wildfire-prone or climate-exposed states.
ZestyAI maintains strong relationships with regulators at both the state and national levels and actively engages with industry organizations such as the National Association of Insurance Commissioners (NAIC) to stay ahead of evolving policy trends. Through its in-house Rating and Advisory organization, ZestyAI directly files models with state insurance departments, ensuring that each solution is rigorously vetted before deployment.
“With HB 1182, Colorado is ushering in a new era of accountability and transparency in how insurers assess and price climate-related risk,” said Rehor. “Our role is to ensure insurers not only meet these requirements but also improve the overall policyholder experience by making wildfire risk models easier to understand and act upon.”
By combining cutting-edge AI, explainable models, and regulatory foresight, ZestyAI offers insurers a comprehensive pathway to compliance—while supporting smarter underwriting and more meaningful customer engagement in the face of increasing wildfire threats.
