Colorado Division of Insurance Issues Bulletin for Wildfire-Affected Homeowners

In a significant move to aid homeowners impacted by the catastrophic Marshall and Middle Fork Fires of 2021, the Colorado Division of Insurance (DORA) has issued Bulletin No. B-5.48, offering guidance on the payment of recoverable depreciation and certain coverages. The bulletin addresses the urgent needs of consumers who may lose coverage benefits calculated in their estimates for property repair or replacement.

The Marshall and Middle Fork Fires destroyed nearly 1,100 residential and commercial structures and damaged thousands more. As the time limits on many homeowners’ insurance policies approach, there has been a surge in consumer inquiries about extending these limits to ensure complete and adequate restoration, rebuilding, or replacement of insured structures and personal property.

Recognizing the efforts of insured individuals working towards property restoration, DORA is requesting insurers to toll or temporarily suspend any time limits related to applicable coverages and endorsements. This includes recoverable depreciation, law and ordinance, and extended replacement cost coverages. Insurers are instructed to consider tolling for policyholders who have made a good faith attempt to restore, rebuild, or replace their property for the duration necessary to complete repairs or replacement. 

Further, insurers are expected to make the process of requesting extensions on time limits and coverage accessible, simple, transparent, and well-communicated by February 16, 2024. DORA has indicated that non-compliance with these guidelines, including failure to reasonably accommodate the tolling of policy time limits and extending necessary coverages, may be viewed as non-compliant with good faith insurance practices and could lead to a Market Conduct Examination. 

This bulletin is a critical step in supporting Colorado homeowners affected by the 2021 fires, ensuring they receive fair and reasonable assistance from their insurers during the rebuilding process. If you need guidance on how Bulletin No. B-5.48 applies to your claim, please contact our office.