As we roll into another Colorado summer, it’s (unfortunately) time to start thinking about wildfire. How to protect your home and what to do if catastrophe strikes are top of mind. While we hope the next few months remain relatively uneventful, it’s important to remember that Colorado law provides specific and important protections for policyholders forced to navigate wildfire claims. This post summarizes the key provisions of C.R.S. 10-4-110.8 pertaining to total losses of owner-occupied dwellings and/or personal property contents due a governor-declared wildfire disaster.

Key Definitions

The statute defines a “wildfire” as a rapidly spreading fire that is difficult to control and occurs in areas with combustible vegetation, such as trees, grass, brush, or bushes. This type of fire causes widespread or severe damage to property, regardless of the original source of ignition.

The statute defines a “dwelling” as a single-family home, excluding mobile homes, condominiums, or manufactured homes, that is used as a primary residence by the owner.

Support and Flexibility for Policyholders

The statute provides several measures to support policyholders in the aftermath of a wildfire disaster:

1. Extended Time for Claims and Rebuilding: Policyholders are granted at least thirty-six months to submit receipts and invoices for replacement costs following a total loss, with the option to extend this period twice by six months if they encounter unavoidable delays. This flexibility acknowledges the challenges homeowners face in rebuilding after a disaster.
2. Additional Living Expense Coverage: Homeowners’ insurance policies must include additional living expense (ALE) coverage for at least twenty-four months, with the option to extend this period twice by six months if delays occur in receiving necessary permits or reconstruction. This provision ensures that policyholders have the financial support needed for temporary housing during the rebuilding process.
3. Replacement Cost Flexibility: Policyholders have the option to rebuild at the original location or a new location without the replacement cost calculation including the value of the land. This flexibility allows homeowners to make decisions that best suit their circumstances and future plans.
4. Use of Claims Payments: The statute allows policyholders to use claims payments from coverage against the loss of outbuildings and other structures to pay for a replacement residence if the coverage limit for the primary residence is insufficient. This provision provides additional financial resources for rebuilding efforts.
5. Simplified Inventory Process: In the event of a total loss of contents due to a wildfire, insurers must offer policyholders a minimum of sixty-five percent of the contents coverage limit without requiring a written inventory. This simplifies the claims process and expedites financial recovery for policyholders.
6. Timely Payment for Loss of Use: Insurers are required to pay for the loss of use of the insured property within twenty days after receiving documentation, such as a signed lease for temporary housing. This ensures that policyholders receive timely financial support for their immediate housing needs.

Statutory Purpose and Goal

These provisions reflect a legislative commitment to supporting policyholders through the challenges of recovering from catastrophic wildfires. Understanding these key provisions can empower policyholders to navigate their insurance claims more effectively and make informed decisions about their recovery and rebuilding efforts. If you need assistance navigating your own wildfire claim, Hailey | Hart is here to help.