Second Regular Session
Seventy-third General Assembly
STATE OF COLORADO
REREVISED
This Version Includes All Amendments
Adopted in the Second House
LLS NO. 22-0277.01 Richard Sweetman x4333
HOUSE BILL 22-1111
House Committees Senate Committees
Business Affairs & Labor Business, Labor, & Technology
Appropriations 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
SENATE
3rd Reading Unamended
April 20, 2022
SENATE
Amended 2nd Reading
April 19, 2022
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, Bridges, Buckner, Coleman, Coram, Danielson, Donovan, Fields,
Ginal, Gonzales, Hansen, Hinrichsen, Hisey, Jaquez Lewis, Kolker, Lee, Moreno, Pettersen,
Priola, Simpson, Sonnenberg, Story, Winter, Woodward, Zenzinger
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
1111
-3- (I) ALLOW THE POLICYHOLDER AT LEAST THIRTY -SIX MONTHS TO1
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 INITIAL PAYMENT TOWARD4
THE ACTUAL CASH VALUE OF THE DAMAGE OR LOSS ; AND5
(II) P
ROVIDE THAT, IN ADDITION TO THE PERIOD DESCRIBED IN6
SUBSECTION
(13)(b)(I) OF THIS SECTION, THE POLICYHOLDER HAS THE7
OPTION TO TWICE EXTEND SUCH PERIOD BY SIX MONTHS IF THE8
POLICYHOLDER, ACTING IN GOOD FAITH AND WITH REASONABLE9
DILIGENCE, ENCOUNTERS UNAVOIDABLE DELAYS IN OBTAINING A10
CONSTRUCTION PERMIT, LACKS NECESSARY CONSTRUCTION MATERIALS,11
LACKS AVAILABLE CONTRACTORS TO PERFORM NECESSARY WORK, OR12
ENCOUNTERS OTHER CIRCUMSTANCES BEYOND THE POLICYHOLDER'S13
CONTROL. THIS SUBSECTION (13)(b)(II) DOES NOT PROHIBIT AN INSURER14
FROM ALLOWING A POLICYHOLDER ADDITIONAL TIME TO COLLECT THE15
FULL REPLACEMENT COST FOR LOST OR DAMAGED PROPERTY OR FOR16
ADDITIONAL LIVING EXPENSES.17
(c) THE POLICY MUST INCLUDE ADDITIONAL LIVING EXPENSE18
COVERAGE TO APPLY IN THE EVENT OF SUCH A LOSS . NOTWITHSTANDING19
SUBSECTION (6)(b) OF THIS SECTION, ADDITIONAL LIVING EXPENSE20
COVERAGE MUST BE AVAILABLE FOR A PERIOD OF AT LEAST TWENTY-FOUR21
MONTHS, AND THE INSURER SHALL OFFER THE POLICYHOLDER THE22
OPPORTUNITY TO TWICE EXTEND SUCH PERIOD BY SIX MONTHS IF THE23
POLICYHOLDER, ACTING IN GOOD FAITH AND WITH REASONABLE24
DILIGENCE, ENCOUNTERS A DELAY OR DELAYS IN RECEIVING NECESSARY25
PERMIT APPROVALS FOR, OR RECONSTRUCTION OF, THE INSURED26
OWNER-OCCUPIED RESIDENCE, WHICH DELAYS ARE BEYOND THE CONTROL27
1111
-4- OF THE POLICYHOLDER.1
(d) THE POLICY MUST PROVIDE THAT, NOTWITHSTANDING2
SUBSECTION (11)(c) OF THIS SECTION, TO REPLACE PERSONAL PROPERTY3
AND RECEIVE RECOVERABLE DEPRECIATION ON THAT PROPERTY, AN4
INSURER SHALL ALLOW THE POLICYHOLDER THE GREATER OF :5
(I) AT LEAST THREE HUNDRED SIXTY -FIVE DAYS AFTER THE6
EXPIRATION OF ALE; OR7
(II) THIRTY-SIX MONTHS AFTER THE INSURER PROVIDES THE8
POLICYHOLDER THE FIRST PAYMENT TOWARD THE ACTUAL CASH VALUE OF9
SUCH LOSS.10
(e) THE POLICY MUST PROVIDE THAT THE INSURER WILL PAY THE11
POLICYHOLDER FOR THE LOSS OF USE OF THE INSURED PROPERTY WITHIN12
TWENTY DAYS AFTER THE INSURER RECEIVES DOCUMENTATION OF SUCH13
LOSS, WHICH DOCUMENTATION MAY INCLUDE A SIGNED LEASE THAT14
OBLIGATES THE POLICYHOLDER TO PAY FOR TEMPORARY REPLACEMENT15
HOUSING; EXCEPT THAT:16
(I) IF A POLICYHOLDER PROVIDES A SIGNED LEASE AS17
DOCUMENTATION, THE INSURER MAY PAY THE POLICYHOLDER IN MONTHLY18
OR OTHER INCREMENTS, IN ACCORDANCE WITH THE TERMS OF THE LEASE;19
AND20
(II) ALTERNATIVELY, AN INSURER MAY PROVIDE ADVANCE RENT21
PAYMENTS FOR HOUSING FOR THE POLICYHOLDER , FAMILY MEMBERS,22
LIVESTOCK, AND PETS, AS NECESSARY.23
(f) THE POLICY MUST PROVIDE THAT THE POLICYHOLDER MAY24
EITHER:25
(I) R
EPLACE THE INSURED
OWNER-OCCUPIED RESIDENCE AT THE26
CURRENT LOCATION OR ANOTHER LOCATION , IN EITHER OF WHICH CASE27
1111
-5- THE CALCULATION OF THE REPLACEMENT COST OF THE INSURED1
OWNER-OCCUPIED RESIDENCE SHALL NOT INCLUDE CONSIDERATION OF THE2
VALUE OF THE LAND UPON WHICH THE REPLACEMENT RESIDENCE IS3
LOCATED; OR4
(II) U
SE THE PROCEEDS FROM THE POLICY TO PURCHASE AN5
EXISTING RESIDENCE AT A NEW
LOCATION, IN WHICH CASE THE6
CALCULATION OF THE REPLACEMENT COST OF THE INSURED7
OWNER-OCCUPIED RESIDENCE SHALL NOT INCLUDE CONSIDERATION OF THE8
VALUE OF THE LAND UPON WHICH THE EXISTING RESIDENCE IS LOCATED .9
(g) THE POLICY MUST ALLOW A POLICYHOLDER TO USE CLAIMS10
PAYMENTS RESULTING FROM COVERAGE AGAINST THE LOSS OF11
OUTBUILDINGS, DWELLING EXTENSIONS, AND OTHER STRUCTURES TO PAY12
THE COSTS OF A REPLACEMENT RESIDENCE IF THE COVERAGE LIMIT THAT13
APPLIES TO THE POLICYHOLDER'S OWNER-OCCUPIED RESIDENCE IS14
INSUFFICIENT TO PAY FOR REBUILDING OR REPLACING THE15
OWNER-OCCUPIED RESIDENCE. ANY CLAIMS PAYMENTS FOR LOSSES16
PURSUANT TO THIS SUBSECTION (13)(g) FOR WHICH REPLACEMENT COST17
COVERAGE IS APPLICABLE SHALL BE FOR THE FULL REPLACEMENT VALUE18
OF THE LOSS WITHOUT REQUIRING ACTUAL REPLACEMENT OF THE OTHER19
STRUCTURES. CLAIMS PAYMENTS FOR OTHER STRUCTURES IN EXCESS OF20
THE AMOUNT APPLIED TOWARD THE NECESSARY COST TO REBUILD OR21
REPLACE THE DAMAGED OR DESTROYED DWELLING SHALL BE PAID22
ACCORDING TO THE TERMS OF THE POLICY .23
(h) WITHIN A REASONABLE AMOUNT OF TIME AFTER RECEIVING A24
CLAIM UNDER AN ISSUED POLICY, AN INSURER SHALL PROVIDE TO THE25
POLICYHOLDER:26
(I) APPROPRIATE CONTACT INFORMATION THAT ALLOWS FOR27
1111
-6- DIRECT CONTACT WITH EITHER AN EMPLOYEE OF THE INSURER OR A1
REPRESENTATIVE WHO IS CAPABLE OF ELEVATING COMPLAINTS OR2
INQUIRIES TO AN EMPLOYEE OF THE INSURER ;3
(II) AT LEAST ONE MEANS OF COMMUNICATION DURING REGULAR4
BUSINESS HOURS; AND5
(III) A WRITTEN STATUS REPORT IF, WITHIN A SIX-MONTH PERIOD,6
THE POLICYHOLDER IS ASSIGNED A THIRD OR SUBSEQUENT ADJUSTER TO7
BE PRIMARILY RESPONSIBLE FOR A CLAIM. THE WRITTEN STATUS REPORT8
MUST INCLUDE A SUMMARY OF ANY DECISIONS OR ACTIONS THAT ARE9
SUBSTANTIALLY RELATED TO THE DISPOSITION OF A CLAIM, INCLUDING10
THE AMOUNT OF LOSSES TO STRUCTURES OR CONTENTS , THE RETENTION11
OF CONSULTATION OF DESIGN OR CONSTRUCTION PROFESSIONALS , THE12
AMOUNT OF COVERAGE FOR LOSSES TO STRUCTURES OR CONTENTS, AND13
ALL ITEMS OF DISPUTE.14
(14) IF A HOMEOWNERS INSURANCE POLICYHOLDER EXPERIENCES15
A TOTAL LOSS OF THE CONTENTS OF AN OWNER -OCCUPIED RESIDENCE16
THAT WAS DOCUMENTED AS BEING FURNISHED AT THE TIME OF LOSS AS A17
RESULT OF A WILDFIRE DISASTER THAT IS DECLARED BY THE GOVERNOR18
PURSUANT TO SECTION 24-33.5-704, THE INSURER SHALL: 19
(a) N
OTWITHSTANDING SUBSECTION (11)(a) OF THIS SECTION,20
OFFER THE POLICYHOLDER A MINIMUM OF
SIXTY-FIVE PERCENT, OR A21
LARGER PERCENT BY MUTUAL AGREEMENT OF THE POLICYHOLDER AND22
INSURER, OF THE LIMIT OF THE CONTENTS COVERAGE INDICATED IN THE23
DECLARATION PAGE OF THE POLICY WITHOUT REQUIRING THE24
POLICYHOLDER TO SUBMIT A WRI TTEN INVENTORY OF THE CONTENTS ;25
(b) N
OTIFY THE POLICYHOLDER THAT:26 (I) ACCEPTANCE OF THE MONEY DESCRIBED IN SUBSECTION (14)(a)27
1111
-7- OF THIS SECTION DOES NOT CHANGE THE BENEFITS AVAILABLE UNDER THE1
POLICY;2
(II) A
DDITIONAL MONEY MAY BE AVAILABLE IF THE3
POLICYHOLDER SUBMITS AN INVENTORY ; AND4
(III) T
HE INSURER IS REQUIRED, PURSUANT TO SUBSECTION (11)(b)5
OF THIS SECTION, TO DISCLOSE ITS METHODOLOGY FOR DETERMINING THE6
DEPRECIATED VALUE OF THE CONTENTS OF INSURED PROPERTY ;7
(c)
(I) IF THE POLICYHOLDER SUBMITS AN INVENTORY OF8
PERSONAL PROPERTY LOSSES IN AN AMOUNT THAT EXCEEDS THE AMOUNT9
PAID TO THE POLICYHOLDER PURSUANT TO SUBSECTION (14)(a) OF THIS10
SECTION:11
(A) REQUEST ANY ADDITIONAL INFORMATION CONCERNING THE12
INVENTORY NO LATER THAN THIRTY DAYS AFTER RECEIVING THE13
INVENTORY; AND14
(B) PROVIDE PAYMENT FOR ANY COVERED AND UNDISPUTED ITEMS15
WITHIN THIRTY DAYS AFTER RECEIVING THE INVENTORY . 16
(II) THE COMMISSIONER SHALL ADOPT RULES TO SIMPLIFY THE17
PROCESS FOR POLICYHOLDERS TO SUBMIT AN INVENTORY FOR PERSONAL18
PROPERTY LOSSES AND EXPEDITE REIMBURSEMENT FOR SUCH LOSSES .19
(d) P
ROVIDE PAYMENT FOR COVERED COSTS ASSOCIATED WITH THE20
REMOVAL OF DEBRIS WITHIN
SIXTY DAYS AFTER RECEIVING AN INVOICE ,21
RECEIPT, OR OTHER DOCUMENTATION INDICATING THE DATE AND COST OF22
THE REMOVAL OF THE DEBRIS ; EXCEPT THAT, IN CASES WHERE DEBRIS23
REMOVAL IS CONDUCTED BY, OR IN COORDINATION WITH, GOVERNMENTAL24
ENTITIES, PAYMENT FOR COVERED COSTS FOR REMOVAL OF DEBRIS WILL25
BE PROVIDED WITHIN A REASONABLE AMOUNT OF TIME ; AND26
(e) P
ROVIDE PAYMENT FOR ANY COVERED LOSS OF TREES , SHRUBS,27
1111
-8- AND LANDSCAPING WITHIN THIRTY DAYS AFTER THE INSURER RECEIVES1
DOCUMENTATION OF SUCH LOSS, SUCH AS DOCUMENTATION FROM A2
REPUTABLE LANDSCAPING COMPANY , SHOWING THE NUMBER AND NATURE3
OF TREES, SHRUBS, AND LANDSCAPING FEATURES DAMAGED OR4
DESTROYED.5
(15) T
HE COMMISSIONER MAY ADOPT RULES AS NECESSARY FOR6 WILDFIRE DISASTERS THAT THE GOVERNOR DECLARES PURSUANT TO7
SECTION 24-33.5-704 AND FOR THE IMPLEMENTATION OF SUBSECTIONS8
(13) AND (14) OF THIS SECTION.9
SECTION 2. Appropriation. (1) For the 2022-23 state fiscal10
year, $66,781 is appropriated to the department of regulatory agencies for11
use by the division of insurance. This appropriation is from the division12
of insurance cash fund created in section 10-1-103 (3), C.R.S. To13
implement this act, the division may use this appropriation as follows:14
(a) $59,231 for personal services, which amount is based on an15
assumption that the division will require an additional 1.0 FTE; and16
(b) $7,550 for operating expenses.17
SECTION 3. Act subject to petition - effective date -18
applicability. (1) This act takes effect at 12:01 a.m. on the day following19
the expiration of the ninety-day period after final adjournment of the20
general assembly; except that, if a referendum petition is filed pursuant21
to section 1 (3) of article V of the state constitution against this act or an22
item, section, or part of this act within such period, then the act, item,23
section, or part will not take effect unless approved by the people at the24
general election to be held in November 2022 and, in such case, will take25
effect on the date of the official declaration of the vote thereon by the26
governor.27
1111
-9- (2) This act applies to the offer, issuance, and renewal of property1
and casualty insurance policies in the state and to the administration of2
claims pursuant to such policies on and after the applicable effective date3
of this act.4
1111
-10-