Devastation from 2012 Colorado Wildfire Season Sparks New Insurance Changes for Homeowners

North Boulder Colorado Fire Above in the Hills

Coming off last year’s record wildfire season, Colorado lawmakers are hoping to alleviate future victims of wildfires by implementing new insurance changes for homeowners. The year 2012 after all, destroyed more than 600 homes, making it the most devastating and the most expensive wildfire season in Colorado history.

House Bill 1225 was drafted with the intention of making home insurance policies more user-friendly and easier to understand. The bill has already passed the Senate and is headed for the governor’s desk next.

Summary of proposed insurance changes include:

Requires allotting homeowners more time to file an inventory of the contents of their house following a total loss claim for reimbursement.
Requires homeowner insurance policies to be written more clearly and in very plain language so everyone can understand their coverage.
Requires insurers to offer extended replacement coverage and law and ordinance coverage, with an explanation of the terms of this coverage;
Requires insurers to include at least one year of additional living expense coverage and to offer a total of 24 months of additional living expense coverage
Requires an insurer to provide policyholders with an updated estimate of replacement cost based on a construction inflation index and revalidate the replacement-cost estimate based on contact with the policyholder
Requires an insurer to consider an estimate from a homeowner’s licensed contractor or licensed architect as the basis for establishing the replacement cost;
Specifies that policyholders have the right to a written notification, at renewal, describing changes in their insurance contract language that are applicable to the renewal period.

Carole Walker Executive Director at Rocky Mountain Insurance weighs in:

House Bill 1225 will hopefully strike a balance amongst insurance companies and lawmakers alike who have had ongoing dialog about how to provide Coloradans with real reform for policyholders in terms of preserving choices for homeowners and mandating coverage availability.”

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