Second Regular Session
Seventy-third General Assembly
STATE OF COLORADO
REENGROSSED
This Version Includes All Amendments
Adopted in the House of Introduction
LLS NO. 22-0277.01 Richard Sweetman x4333
HOUSE BILL 22-1111
House Committees Senate Committees
Business Affairs & Labor
Appropriations
A BILL FOR AN ACT
C
ONCERNING INSURANCE COVERAGE FOR INSURED LOSSES INCURRED101
AS A RESULT OF A DECLARED FIRE
DISASTER, AND, IN102
CONNECTION THEREWITH , MAKING AN APPROPRIATION .103
Bill Summary
(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://leg.colorado.gov
.)
The bill establishes new coverage requirements for property and
casualty insurance policies issued or renewed in Colorado, which
requirements apply in the event of a loss of a residence as a result of a
declared fire disaster.
The bill also establishes new requirements for insurers who issue
HOUSE
3rd Reading Unamended
March 16, 2022
HOUSE
Amended 2nd Reading
March 15, 2022
HOUSE SPONSORSHIP
Amabile, Bacon, Benavidez, Bernett, Bird, Boesenecker, Caraveo, Cutter, Duran, Esgar,
Exum, Froelich, Garnett, Gonzales-Gutierrez, Gray, Hooton, Jodeh, Kipp, Lindsay, Lontine,
Lynch, McCluskie, McCormick, McLachlan, Roberts, Sirota, Snyder, Titone, Valdez A.,
Valdez D., Weissman, Young
SENATE SPONSORSHIP
Rankin and Fenberg,
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing statute.
Dashes through the words indicate deletions from existing statute. or renew property and casualty insurance policies, which requirements
concern an insurer's handling of policy claims after such a loss occurs.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, 10-4-110.8, amend2
(3) introductory portion and (3)(g); and add (3)(h), (3)(i), (13), (14), and3
(15) as follows:4
10-4-110.8. Homeowner's insurance - prohibited and required5
practices - estimates of replacement value - additional living expense6
coverage - copies of policies - personal property contents coverage -7
inventory of personal property - requirements concerning total loss8
scenarios resulting from wildfire disasters - definitions - rules.9
(3) For the purposes of AS USED in this section, unless the context10
otherwise requires:11
(g) "Recoverable depreciation" means the difference between the12
cost to replace insured property and the actual cash value of the13
property. (I) "OWNER-OCCUPIED RESIDENCE" MEANS A RESIDENCE THAT14
IS OCCUPIED PRIMARILY FOR THE USE OF THE OWNER AND THE OWNER 'S15
DESIGNEES.16
(II) "OWNER-OCCUPIED RESIDENCE" INCLUDES, BUT IS NOT17
LIMITED TO, AN OWNER-OCCUPIED PRIMARY RESIDENCE .18
(III) "OWNER-OCCUPIED RESIDENCE" DOES NOT INCLUDE ANY19
PROPERTY THAT IS INSURED UNDER A COMMERCIAL INSURANCE OR20
AGRIBUSINESS POLICY.21
(h) "RECOVERABLE DEPRECIATION" MEANS THE DIFFERENCE22
BETWEEN THE COST TO REPLACE INSURED PROPERTY AND THE ACTUAL23
CASH VALUE OF THE PROPERTY.24
(i) "WILDFIRE" MEANS A RAPIDLY SPREADING FIRE THAT IS25
1111-2- DIFFICULT TO BRING UNDER CONTROL IN AN AREA THAT INCLUDES1
COMBUSTIBLE VEGETATION, SUCH AS TREES, GRASS, BRUSH, OR BUSHES,2
WHICH FIRE CAUSES WIDESPREAD OR SEVERE DAMAGE TO PROPERTY ,3
REGARDLESS OF THE ORIGINAL SOURCE OF IGNITION OF THE FIRE .4
(13) IN OFFERING, ISSUING, OR RENEWING A HOMEOWNERS5
INSURANCE POLICY IN THIS STATE, AN INSURER SHALL COMPLY WITH THE6
FOLLOWING MINIMUM REQUIREMENTS CONCERNING COVERAGE PROVIDED7
UNDER THE POLICY TO POLICYHOLDERS TO PROTECT THEM FROM DAMAGES8
THAT OCCUR IN THE EVENT OF A TOTAL LOSS OF AN OWNER -OCCUPIED9
RESIDENCE, INCLUDING THE CONTENTS OF THE OWNER-OCCUPIED10
RESIDENCE, WHICH LOSS OCCURS AS A RESULT OF A WILDFIRE DISASTER11
THAT THE GOVERNOR DECLARES PURSUANT TO SECTION 24-33.5-704:12
(a) A POLICY OF HOMEOWNERS INSURANCE MAY NOT LIMIT OR13
DENY A PAYMENT OF THE BUILDING CODE UPGRADE COST OR A PAYMENT14
OF ANY EXTENDED REPLACEMENT COST AVAILABLE UNDER THE POLICY15
COVERAGE FOR A POLICYHOLDER 'S STRUCTURE THAT WAS A TOTAL LOSS16
ON THE BASIS THAT THE POLICYHOLDER DECIDED TO REBUILD IN A NEW17
LOCATION OR TO PURCHASE AN EXISTING STRUCTURE IN A NEW LOCATION18
IF THE POLICY OTHERWISE COVERS THE REPLACEMENT COST OR BUILDING19
CODE UPGRADE COST; EXCEPT THAT THE MEASURE OF INDEMNITY MAY20
NOT EXCEED THE REPLACEMENT COST, INCLUDING THE UPGRADE COSTS21
AND EXTENDED REPLACEMENT COST FOR REPAIRING, REBUILDING, OR22
REPLACING THE STRUCTURE AT THE ORIGINAL LOCATION OF THE LOSS .23
(b) IF A POLICY OF HOMEOWNERS INSURANCE REQUIRES A24
POLICYHOLDER TO REPAIR, REBUILD, OR REPLACE DAMAGED OR LOST25
PROPERTY IN ORDER TO COLLECT THE FULL REPLACEMENT COST FOR THE26
PROPERTY, THE INSURER, SUBJECT TO THE POLICY LIMITS, SHALL:27
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-3- (I) ALLOW THE POLICYHOLDER AT LEAST TWENTY -FOUR MONTHS1
TO SUBMIT RECEIPTS AND INVOICES FOR THE REPLACEMENT COSTS OF THE2
INSURED OWNER-OCCUPIED RESIDENCE, WHICH PERIOD BEGINS ON THE3
DATE UPON WHICH THE INSURER PROVIDES THE POLICYHOLDER A4
REASONABLE, ACCURATE, AND TIMELY ESTIMATE OF THE ACTUAL CASH5
VALUE OF THE LOSS; AND6
(II) P
ROVIDE THAT, IN ADDITION TO THE PERIOD DESCRIBED IN7
SUBSECTION
(13)(b)(I) OF THIS SECTION, THE POLICYHOLDER HAS THE8
OPTION TO TWICE EXTEND SUCH PERIOD BY SIX MONTHS IF THE9
POLICYHOLDER, ACTING IN GOOD FAITH AND WITH REASONABLE10
DILIGENCE, ENCOUNTERS UNAVOIDABLE DELAYS IN OBTAINING A11
CONSTRUCTION PERMIT, LACKS NECESSARY CONSTRUCTION MATERIALS ,12
LACKS AVAILABLE CONTRACTORS TO PERFORM NECESSARY WORK , OR13
ENCOUNTERS OTHER CIRCUMSTANCES BEYOND THE POLICYHOLDER'S14
CONTROL. THIS SUBSECTION (13)(b)(II) DOES NOT PROHIBIT AN INSURER15
FROM ALLOWING A POLICYHOLDER ADDITIONAL TIME TO COLLECT THE16
FULL REPLACEMENT COST FOR LOST OR DAMAGED PROPERTY OR FOR17
ADDITIONAL LIVING EXPENSES.18
(c) THE POLICY MUST INCLUDE ADDITIONAL LIVING EXPENSE19
COVERAGE TO APPLY IN THE EVENT OF SUCH A LOSS . NOTWITHSTANDING20
SUBSECTION (6)(b) OF THIS SECTION, ADDITIONAL LIVING EXPENSE21
COVERAGE MUST BE AVAILABLE FOR A PERIOD OF AT LEAST TWENTY-FOUR22
MONTHS, AND THE INSURER SHALL OFFER THE POLICYHOLDER THE23
OPPORTUNITY TO TWICE EXTEND SUCH PERIOD BY SIX MONTHS IF THE24
POLICYHOLDER, ACTING IN GOOD FAITH AND WITH REASONABLE25
DILIGENCE, ENCOUNTERS A DELAY OR DELAYS IN RECEIVING NECESSARY26
PERMIT APPROVALS FOR, OR RECONSTRUCTION OF, THE INSURED27
1111
-4- OWNER-OCCUPIED RESIDENCE, WHICH DELAYS ARE BEYOND THE CONTROL1
OF THE POLICYHOLDER.2
(d) THE POLICY MUST PROVIDE THAT, NOTWITHSTANDING3
SUBSECTION (11)(c) OF THIS SECTION, TO REPLACE PROPERTY AND4
RECEIVE RECOVERABLE DEPRECIATION ON THAT PROPERTY, AN INSURER5
SHALL ALLOW THE POLICYHOLDER THE GREATER OF :6
(I) AT LEAST THREE HUNDRED SIXTY -FIVE DAYS AFTER THE7
EXPIRATION OF ALE; OR8
(II) THIRTY-SIX MONTHS AFTER THE INSURER PROVIDES THE9
POLICYHOLDER THE FIRST PAYMENT TOWARD THE ACTUAL CASH VALUE OF10
SUCH LOSS.11
(e) THE POLICY MUST PROVIDE THAT THE INSURER WILL PAY THE12
POLICYHOLDER FOR THE LOSS OF USE OF THE INSURED PROPERTY WITHIN13
TWENTY DAYS AFTER THE INSURER RECEIVES DOCUMENTATION OF SUCH14
LOSS, WHICH DOCUMENTATION MAY INCLUDE A SIGNED LEASE THAT15
OBLIGATES THE POLICYHOLDER TO PAY FOR TEMPORARY REPLACEMENT16
HOUSING; EXCEPT THAT:17
(I) IF A POLICYHOLDER PROVIDES A SIGNED LEASE AS18
DOCUMENTATION, THE INSURER MAY PAY THE POLICYHOLDER IN MONTHLY19
OR OTHER INCREMENTS, IN ACCORDANCE WITH THE TERMS OF THE LEASE;20
AND21
(II) ALTERNATIVELY, AN INSURER MAY PROVIDE ADVANCE RENT22
PAYMENTS FOR HOUSING FOR THE POLICYHOLDER, FAMILY MEMBERS,23
LIVESTOCK, AND PETS, AS NECESSARY.24
(f) THE POLICY MUST PROVIDE THAT THE POLICYHOLDER MAY25
EITHER:26
(I) R
EPLACE THE INSURED
OWNER-OCCUPIED RESIDENCE AT THE27
1111
-5- CURRENT LOCATION OR ANOTHER LOCATION , IN EITHER OF WHICH CASE1
THE CALCULATION OF THE REPLACEMENT COST OF THE INSURED2
OWNER-OCCUPIED RESIDENCE SHALL NOT INCLUDE CONSIDERATION OF THE3
VALUE OF THE LAND UPON WHICH THE REPLACEMENT RESIDENCE IS4
LOCATED; OR5
(II) U
SE THE PROCEEDS FROM THE POLICY TO PURCHASE AN6
EXISTING RESIDENCE AT A NEW
LOCATION, IN WHICH CASE THE7
CALCULATION OF THE REPLACEMENT COST OF THE INSURED8
OWNER-OCCUPIED RESIDENCE SHALL NOT INCLUDE CONSIDERATION OF THE9
VALUE OF THE LAND UPON WHICH THE EXISTING RESIDENCE IS LOCATED .10
(g) THE POLICY MUST ALLOW A POLICYHOLDER TO USE PROCEEDS11
RESULTING FROM COVERAGE AGAINST THE LOSS OF OUTBUILDINGS ,12
DWELLING EXTENSIONS, AND OTHER STRUCTURES TO PAY THE COSTS OF A13
REPLACEMENT RESIDENCE IF THE COVERAGE LIMIT THAT APPLIES TO THE14
POLICYHOLDER'S OWNER-OCCUPIED RESIDENCE IS INSUFFICIENT TO PAY15
FOR REBUILDING OR REPLACING THE OWNER -OCCUPIED RESIDENCE.16
(h) WITHIN A REASONABLE AMOUNT OF TIME AFTER RECEIVING A17
CLAIM UNDER AN ISSUED POLICY, AN INSURER SHALL PROVIDE TO THE18
POLICYHOLDER:19
(I) APPROPRIATE CONTACT INFORMATION THAT ALLOWS FOR20
DIRECT CONTACT WITH EITHER AN EMPLOYEE OF THE INSURER OR A21
REPRESENTATIVE WHO IS CAPABLE OF ELEVATING COMPLAINTS OR22
INQUIRIES TO AN EMPLOYEE OF THE INSURER ;23
(II) AT LEAST ONE MEANS OF COMMUNICATION DURING REGULAR24
BUSINESS HOURS; AND25
(III) A WRITTEN STATUS REPORT IF, WITHIN A SIX-MONTH PERIOD,26
THE POLICYHOLDER IS ASSIGNED A THIRD OR SUBSEQUENT ADJUSTER TO27
1111
-6- BE PRIMARILY RESPONSIBLE FOR A CLAIM. THE WRITTEN STATUS REPORT1
MUST INCLUDE A SUMMARY OF ANY DECISIONS OR ACTIONS THAT ARE2
SUBSTANTIALLY RELATED TO THE DISPOSITION OF A CLAIM, INCLUDING3
THE AMOUNT OF LOSSES TO STRUCTURES OR CONTENTS , THE RETENTION4
OF CONSULTATION OF DESIGN OR CONSTRUCTION PROFESSIONALS , THE5
AMOUNT OF COVERAGE FOR LOSSES TO STRUCTURES OR CONTENTS , AND6
ALL ITEMS OF DISPUTE.7
(14) IF A HOMEOWNERS INSURANCE POLICYHOLDER EXPERIENCES8
A TOTAL LOSS OF THE CONTENTS OF AN OWNER -OCCUPIED RESIDENCE9
THAT WAS DOCUMENTED AS BEING FURNISHED AT THE TIME OF LOSS AS A10
RESULT OF A WILDFIRE DISASTER THAT IS DECLARED BY THE GOVERNOR11
PURSUANT TO SECTION 24-33.5-704, THE INSURER SHALL: 12
(a) N
OTWITHSTANDING SUBSECTION (11)(a) OF THIS SECTION,13
OFFER THE POLICYHOLDER A MINIMUM OF
SIXTY-FIVE PERCENT, OR A14
LARGER PERCENT BY MUTUAL AGREEMENT OF THE POLICYHOLDER AND15
INSURER, OF THE LIMIT OF THE CONTENTS COVERAGE INDICATED IN THE16
DECLARATION PAGE OF THE POLICY WITHOUT REQUIRING THE17
POLICYHOLDER TO SUBMIT A WRI TTEN INVENTORY OF THE CONTENTS ;18
(b) N
OTIFY THE POLICYHOLDER THAT:19 (I) ACCEPTANCE OF THE MONEY DESCRIBED IN SUBSECTION (14)(a)20
OF THIS SECTION DOES NOT CHANGE THE BENEFITS AVAILABLE UNDER THE21
POLICY;22
(II) A
DDITIONAL MONEY MAY BE AVAILABLE IF THE23
POLICYHOLDER SUBMITS AN INVENTORY ; AND24
(III) T
HE INSURER IS REQUIRED, PURSUANT TO SUBSECTION (11)(b)25
OF THIS SECTION, TO DISCLOSE ITS METHODOLOGY FOR DETERMINING THE26
DEPRECIATED VALUE OF THE CONTENTS OF INSURED PROPERTY ;27
1111
-7- (c) (I) IF THE POLICYHOLDER SUBMITS AN INVENTORY OF1
PERSONAL PROPERTY LOSSES IN AN AMOUNT THAT EXCEEDS THE AMOUNT2
PAID TO THE POLICYHOLDER PURSUANT TO SUBSECTION (14)(a) OF THIS3
SECTION:4
(A) REQUEST ANY ADDITIONAL INFORMATION CONCERNING THE5
INVENTORY NO LATER THAN THIRTY DAYS AFTER RECEIVING THE6
INVENTORY; AND7
(B) PROVIDE PAYMENT FOR ANY COVERED AND UNDISPUTED ITEMS8
WITHIN THIRTY DAYS AFTER RECEIVING THE INVENTORY . 9
(II) THE COMMISSIONER SHALL ADOPT RULES TO SIMPLIFY THE10
PROCESS FOR POLICYHOLDERS TO SUBMIT AN INVENTORY FOR PERSONAL11
PROPERTY LOSSES AND EXPEDITE REIMBURSEMENT FOR SUCH LOSSES .12
(d) P
ROVIDE PAYMENT FOR COVERED COSTS ASSOCIATED WITH THE13
REMOVAL OF DEBRIS WITHIN
SIXTY DAYS AFTER RECEIVING AN INVOICE ,14
RECEIPT, OR OTHER DOCUMENTATION INDICATING THE DATE AND COST OF15
THE REMOVAL OF THE DEBRIS ; EXCEPT THAT, IN CASES WHERE DEBRIS16
REMOVAL IS CONDUCTED BY, OR IN COORDINATION WITH, GOVERNMENTAL17
ENTITIES, PAYMENT FOR COVERED COSTS FOR REMOVAL OF DEBRIS WILL18
BE PROVIDED WITHIN A REASONABLE AMOUNT OF TIME ; AND19
(e) P
ROVIDE PAYMENT FOR ANY COVERED LOSS OF TREES , SHRUBS,20
AND LANDSCAPING WITHIN THIRTY DAYS AFTER THE INSURER RECEIVES21
DOCUMENTATION OF
SUCH LOSS, SUCH AS DOCUMENTATION FROM A22
REPUTABLE LANDSCAPING COMPANY , SHOWING THE NUMBER AND NATURE23
OF TREES, SHRUBS, AND LANDSCAPING FEATURES DAMAGED OR24
DESTROYED.25
(15) T
HE COMMISSIONER MAY ADOPT RULES AS NECESSARY FOR26 WILDFIRE DISASTERS THAT THE GOVERNOR DECLARES PURSUANT TO27
1111
-8- SECTION 24-33.5-704 AND FOR THE IMPLEMENTATION OF SUBSECTIONS1
(13) AND (14) OF THIS SECTION.2
SECTION 2. Appropriation. (1) For the 2022-23 state fiscal3
year, $66,781 is appropriated to the department of regulatory agencies for4
use by the division of insurance. This appropriation is from the division5
of insurance cash fund created in section 10-1-103 (3), C.R.S. To6
implement this act, the division may use this appropriation as follows:7
(a) $59,231 for personal services, which amount is based on an8
assumption that the division will require an additional 1.0 FTE; and9
(b) $7,550 for operating expenses.10
SECTION 3. Act subject to petition - effective date -11
applicability. (1) This act takes effect at 12:01 a.m. on the day following12
the expiration of the ninety-day period after final adjournment of the13
general assembly; except that, if a referendum petition is filed pursuant14
to section 1 (3) of article V of the state constitution against this act or an15
item, section, or part of this act within such period, then the act, item,16
section, or part will not take effect unless approved by the people at the17
general election to be held in November 2022 and, in such case, will take18
effect on the date of the official declaration of the vote thereon by the19
governor.20
(2) This act applies to the offer, issuance, and renewal of property21
and casualty insurance policies in the state and to the administration of22
claims pursuant to such policies on and after the applicable effective date23
of this act.24
1111
-9-