HOUSE BILL 22-1111
BY REPRESENTATIVE(S) Amabile, Benavidez, Bernett, Bird,
Boesenecker, Caraveo, Cutter, Duran, Esgar, Exum, Froelich,
Gonzales-Gutierrez, Gray, Hooton, Jodeh, Kipp, Lindsay, Lontine, Lynch,
McCluskie, McCormick, McLachlan, Roberts, Sirota, Snyder, Titone,
Valdez A., Valdez D., Weissman, Young, Garnett, Bacon, Daugherty,
Herod, Michaelson Jenet, Ortiz, Ricks, Sullivan;
also SENATOR(S) 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.
C
ONCERNING INSURANCE COVERAGE FOR INSURED LOSSES INCURRED AS A
RESULT OF A DECLARED FIRE DISASTER
, AND, IN CONNECTION
THEREWITH
, MAKING AN APPROPRIATION.
Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. In Colorado Revised Statutes, 10-4-110.8, amend (3)
introductory portion and (3)(g); and add (3)(h), (3)(i), (13), (14), and (15)
as follows:
10-4-110.8. Homeowner's insurance - prohibited and required
NOTE: This bill has been prepared for the signatures of the appropriate legislative
officers and the Governor. To determine whether the Governor has signed the bill
or taken other action on it, please consult the legislative status sheet, the legislative
history, or the Session Laws.
________
Capital letters or bold & italic numbers indicate new material added to existing law; dashes
through words or numbers indicate deletions from existing law and such material is not part of
the act. practices - estimates of replacement value - additional living expense
coverage - copies of policies - personal property contents coverage -
inventory of personal property - requirements concerning total loss
scenarios resulting from wildfire disasters - definitions - rules. (3) For
the purposes of AS USED in this section, unless the context otherwise
requires:
(g) "Recoverable depreciation" means the difference between the
cost to replace insured property and the actual cash value of the
property. (I) "OWNER-OCCUPIED RESIDENCE" MEANS A RESIDENCE THAT IS
OCCUPIED PRIMARILY FOR THE USE OF THE OWNER AND THE OWNER
'S
DESIGNEES
.
(II) "O
WNER-OCCUPIED RESIDENCE" INCLUDES, BUT IS NOT LIMITED
TO
, AN OWNER-OCCUPIED PRIMARY RESIDENCE .
(III) "O
WNER-OCCUPIED RESIDENCE" DOES NOT INCLUDE ANY
PROPERTY THAT IS INSURED UNDER A COMMERCIAL INSURANCE OR
AGRIBUSINESS POLICY
.
(h) "R
ECOVERABLE DEPRECIATION " MEANS THE DIFFERENCE
BETWEEN THE COST TO REPLACE INSURED PROPERTY AND THE ACTUAL CASH
VALUE OF THE PROPERTY
.
(i) "W
ILDFIRE" MEANS A RAPIDLY SPREADING FIRE THAT IS DIFFICULT
TO BRING UNDER CONTROL IN AN AREA THAT INCLUDES COMBUSTIBLE
VEGETATION
, SUCH AS TREES, GRASS, BRUSH, OR BUSHES, WHICH FIRE
CAUSES WIDESPREAD OR SEVERE DAMAGE TO PROPERTY
, REGARDLESS OF
THE ORIGINAL SOURCE OF IGNITION OF THE FIRE
.
(13) I
N OFFERING, ISSUING, OR RENEWING A HOMEOWNERS
INSURANCE POLICY IN THIS STATE
, AN INSURER SHALL COMPLY WITH THE
FOLLOWING MINIMUM REQUIREMENTS CONCERNING COVERAGE PROVIDED
UNDER THE POLICY TO POLICYHOLDERS TO PROTECT THEM FROM DAMAGES
THAT OCCUR IN THE EVENT OF A TOTAL LOSS OF AN OWNER
-OCCUPIED
RESIDENCE
, INCLUDING THE CONTENTS OF THE OWNER-OCCUPIED RESIDENCE,
WHICH LOSS OCCURS AS A RESULT OF A WILDFIRE DISASTER THAT THE
GOVERNOR DECLARES PURSUANT TO SECTION
24-33.5-704:
(a) A
POLICY OF HOMEOWNERS INSURANCE MAY NOT LIMIT OR DENY
PAGE 2-HOUSE BILL 22-1111 A PAYMENT OF THE BUILDING CODE UPGRADE COST OR A PAYMENT OF ANY
EXTENDED REPLACEMENT COST AVAILABLE UNDER THE POLICY COVERAGE
FOR A POLICYHOLDER
'S STRUCTURE THAT WAS A TOTAL LOSS ON THE BASIS
THAT THE POLICYHOLDER DECIDED TO REBUILD IN A NEW LOCATION OR TO
PURCHASE AN EXISTING STRUCTURE IN A NEW LOCATION IF THE POLICY
OTHERWISE COVERS THE REPLACEMENT COST OR BUILDING CODE UPGRADE
COST
; EXCEPT THAT THE MEASURE OF INDEMNITY MAY NOT EXCEED THE
REPLACEMENT COST
, INCLUDING THE UPGRADE COSTS AND EXTENDED
REPLACEMENT COST FOR REPAIRING
, REBUILDING, OR REPLACING THE
STRUCTURE AT THE ORIGINAL LOCATION OF THE LOSS
.
(b) I
F A POLICY OF HOMEOWNERS INSURANCE REQUIRES A
POLICYHOLDER TO REPAIR
, REBUILD, OR REPLACE DAMAGED OR LOST
PROPERTY IN ORDER TO COLLECT THE FULL REPLACEMENT COST FOR THE
PROPERTY
, THE INSURER, SUBJECT TO THE POLICY LIMITS, SHALL:
(I) A
LLOW THE POLICYHOLDER AT LEAST THIRTY -SIX MONTHS TO
SUBMIT RECEIPTS AND INVOICES FOR THE REPLACEMENT COSTS OF THE
INSURED OWNER
-OCCUPIED RESIDENCE, WHICH PERIOD BEGINS ON THE DATE
UPON WHICH THE INSURER PROVIDES THE INITIAL PAYMENT TOWARD THE
ACTUAL CASH VALUE OF THE DAMAGE OR LOSS
; AND
(II) PROVIDE THAT, IN ADDITION TO THE PERIOD DESCRIBED IN
SUBSECTION
(13)(b)(I) OF THIS SECTION, THE POLICYHOLDER HAS THE
OPTION TO TWICE EXTEND SUCH PERIOD BY SIX MONTHS IF THE
POLICYHOLDER
, ACTING IN GOOD FAITH AND WITH REASONABLE DILIGENCE ,
ENCOUNTERS UNAVOIDABLE DELAYS IN OBTAINING A CONSTRUCTION
PERMIT
, LACKS NECESSARY CONSTRUCTION MATERIALS , LACKS AVAILABLE
CONTRACTORS TO PERFORM NECESSARY WORK
, OR ENCOUNTERS OTHER
CIRCUMSTANCES BEYOND THE POLICYHOLDER
'S CONTROL. THIS SUBSECTION
(13)(b)(II) DOES NOT PROHIBIT AN INSURER FROM ALLOWING A
POLICYHOLDER ADDITIONAL TIME TO COLLECT THE FULL REPLACEMENT COST
FOR LOST OR DAMAGED PROPERTY OR FOR ADDITIONAL LIVING EXPENSES
.
(c) T
HE POLICY MUST INCLUDE ADDITIONAL LIVING EXPENSE
COVERAGE TO APPLY IN THE EVENT OF SUCH A LOSS
. NOTWITHSTANDING
SUBSECTION
(6)(b) OF THIS SECTION, ADDITIONAL LIVING EXPENSE
COVERAGE MUST BE AVAILABLE FOR A PERIOD OF AT LEAST TWENTY
-FOUR
MONTHS
, AND THE INSURER SHALL OFFER THE POLICYHOLDER THE
OPPORTUNITY TO TWICE EXTEND SUCH PERIOD BY SIX MONTHS IF THE
PAGE 3-HOUSE BILL 22-1111 POLICYHOLDER, ACTING IN GOOD FAITH AND WITH REASONABLE DILIGENCE ,
ENCOUNTERS A DELAY OR DELAYS IN RECEIVING NECESSARY PERMIT
APPROVALS FOR
, OR RECONSTRUCTION OF, THE INSURED OWNER-OCCUPIED
RESIDENCE
, WHICH DELAYS ARE BEYOND THE CONTROL OF THE
POLICYHOLDER
.
(d) T
HE POLICY MUST PROVIDE THAT , NOTWITHSTANDING
SUBSECTION
(11)(c) OF THIS SECTION, TO REPLACE PERSONAL PROPERTY AND
RECEIVE RECOVERABLE DEPRECIATION ON THAT PROPERTY
, AN INSURER
SHALL ALLOW THE POLICYHOLDER THE GREATER OF
:
(I) A
T LEAST THREE HUNDRED SIXTY -FIVE DAYS AFTER THE
EXPIRATION OF
ALE; OR
(II) THIRTY-SIX MONTHS AFTER THE INSURER PROVIDES THE
POLICYHOLDER THE FIRST PAYMENT TOWARD THE ACTUAL CASH VALUE OF
SUCH LOSS
.
(e) T
HE POLICY MUST PROVIDE THAT THE INSURER WILL PAY THE
POLICYHOLDER FOR THE LOSS OF USE OF THE INSURED PROPERTY WITHIN
TWENTY DAYS AFTER THE INSURER RECEIVES DOCUMENTATION OF SUCH
LOSS
, WHICH DOCUMENTATION MAY INCLUDE A SIGNED LEASE THAT
OBLIGATES THE POLICYHOLDER TO PAY FOR TEMPORARY REPLACEMENT
HOUSING
; EXCEPT THAT:
(I) I
F A POLICYHOLDER PROVIDES A SIGNED LEASE AS
DOCUMENTATION
, THE INSURER MAY PAY THE POLICYHOLDER IN MONTHLY
OR OTHER INCREMENTS
, IN ACCORDANCE WITH THE TERMS OF THE LEASE ;
AND
(II) ALTERNATIVELY, AN INSURER MAY PROVIDE ADVANCE RENT
PAYMENTS FOR HOUSING FOR THE POLICYHOLDER
, FAMILY MEMBERS,
LIVESTOCK, AND PETS, AS NECESSARY.
(f) T
HE POLICY MUST PROVIDE THAT THE POLICYHOLDER MAY
EITHER
:
(I) R
EPLACE THE INSURED OWNER -OCCUPIED RESIDENCE AT THE
CURRENT LOCATION OR ANOTHER LOCATION
, IN EITHER OF WHICH CASE THE
CALCULATION OF THE REPLACEMENT COST OF THE INSURED
PAGE 4-HOUSE BILL 22-1111 OWNER-OCCUPIED RESIDENCE SHALL NOT INCLUDE CONSIDERATION OF THE
VALUE OF THE LAND UPON WHICH THE REPLACEMENT RESIDENCE IS
LOCATED
; OR
(II) USE THE PROCEEDS FROM THE POLICY TO PURCHASE AN EXISTING
RESIDENCE AT A NEW LOCATION
, IN WHICH CASE THE CALCULATION OF THE
REPLACEMENT COST OF THE INSURED OWNER
-OCCUPIED RESIDENCE SHALL
NOT INCLUDE CONSIDERATION OF THE VALUE OF THE LAND UPON WHICH THE
EXISTING RESIDENCE IS LOCATED
.
(g) T
HE POLICY MUST ALLOW A POLICYHOLDER TO USE CLAIMS
PAYMENTS RESULTING FROM COVERAGE AGAINST THE LOSS OF
OUTBUILDINGS
, DWELLING EXTENSIONS, AND OTHER STRUCTURES TO PAY
THE COSTS OF A REPLACEMENT RESIDENCE IF THE COVERAGE LIMIT THAT
APPLIES TO THE POLICYHOLDER
'S OWNER-OCCUPIED RESIDENCE IS
INSUFFICIENT TO PAY FOR REBUILDING OR REPLACING THE OWNER
-OCCUPIED
RESIDENCE
. ANY CLAIMS PAYMENTS FOR LOSSES PURSUANT TO THIS
SUBSECTION
(13)(g) FOR WHICH REPLACEMENT COST COVERAGE IS
APPLICABLE SHALL BE FOR THE FULL REPLACEMENT VALUE OF THE LOSS
WITHOUT REQUIRING ACTUAL REPLACEMENT OF THE OTHER STRUCTURES
.
C
LAIMS PAYMENTS FOR OTHER STRUCTURES IN EXCESS OF THE AMOUNT
APPLIED TOWARD THE NECESSARY COST TO REBUILD OR REPLACE THE
DAMAGED OR DESTROYED DWELLING SHALL BE PAID ACCORDING TO THE
TERMS OF THE POLICY
.
(h) W
ITHIN A REASONABLE AM OUNT OF TIME AFTER RECEIVING A
CLAIM UNDER AN ISSUED POLICY
, AN INSURER SHALL PROVIDE TO THE
POLICYHOLDER
:
(I) A
PPROPRIATE CONTACT INFORMATION THAT ALLOWS FOR DIRECT
CONTACT WITH EITHER AN EMPLOYEE OF THE INSURER OR A REPRESENTATIVE
WHO IS CAPABLE OF ELEVATING COMPLAINTS OR INQUIRIES TO AN EMPLOYEE
OF THE INSURER
;
(II) A
T LEAST ONE MEANS OF COMMUNICATION DURING REGULAR
BUSINESS HOURS
; AND
(III) A WRITTEN STATUS REPORT IF, WITHIN A SIX-MONTH PERIOD,
THE POLICYHOLDER IS ASSIGNED A THIRD OR SUBSEQUENT ADJUSTER TO BE
PRIMARILY RESPONSIBLE FOR A CLAIM
. THE WRITTEN STATUS REPORT MUST
PAGE 5-HOUSE BILL 22-1111 INCLUDE A SUMMARY OF ANY DECISIONS OR ACTIONS THAT ARE
SUBSTANTIALLY RELATED TO THE DISPOSITION OF A CLAIM
, INCLUDING THE
AMOUNT OF LOSSES TO STRUCTURES OR CONTENTS
, THE RETENTION OF
CONSULTATION OF DESIGN OR CONSTRUCTION PROFESSIONALS
, THE AMOUNT
OF COVERAGE FOR LOSSES TO STRUCTURES OR CONTENTS
, AND ALL ITEMS OF
DISPUTE
.
(14) I
F A HOMEOWNERS INSURANCE POLICYHOLDER EXPERIENCES A
TOTAL LOSS OF THE CONTENTS OF AN OWNER
-OCCUPIED RESIDENCE THAT
WAS DOCUMENTED AS BEING FURNISHED AT THE TIME OF LOSS AS A RESULT
OF A WILDFIRE DISASTER THAT IS DECLARED BY THE GOVERNOR PURSUANT
TO SECTION
24-33.5-704, THE INSURER SHALL:
(a) N
OTWITHSTANDING SUBSECTION (11)(a) OF THIS SECTION, OFFER
THE POLICYHOLDER A MINIMUM OF SIXTY
-FIVE PERCENT, OR A LARGER
PERCENT BY MUTUAL AGREEMENT OF THE POLICYHOLDER AND INSURER
, OF
THE LIMIT OF THE CONTENTS COVERAGE INDICATED IN THE DECLARATION
PAGE OF THE POLICY WITHOUT REQUIRING THE POLICYHOLDER TO SUBMIT A
WRITTEN INVENTORY OF THE CONTENTS
;
(b) N
OTIFY THE POLICYHOLDER THAT:
(I) A
CCEPTANCE OF THE MONEY DESCRIBED IN SUBSECTION (14)(a)
OF THIS SECTION DOES NOT CHANGE THE BENEFITS AVAILABLE UNDER THE
POLICY
;
(II) A
DDITIONAL MONEY MAY BE AVAILABLE IF THE POLICYHOLDER
SUBMITS AN INVENTORY
; AND
(III) THE INSURER IS REQUIRED, PURSUANT TO SUBSECTION (11)(b)
OF THIS SECTION, TO DISCLOSE ITS METHODOLOGY FOR DETERMINING THE
DEPRECIATED VALUE OF THE CONTENTS OF INSURED PROPERTY
;
(c) (I) I
F THE POLICYHOLDER SUBMITS AN INVENTORY OF PERSONAL
PROPERTY LOSSES IN AN AMOUNT THAT EXCEEDS THE AMOUNT PAID TO THE
POLICYHOLDER PURSUANT TO SUBSECTION
(14)(a) OF THIS SECTION:
(A) R
EQUEST ANY ADDITIONAL INFORMATION CONCERNING THE
INVENTORY NO LATER THAN THIRTY DAYS AFTER RECEIVING THE
INVENTORY
; AND
PAGE 6-HOUSE BILL 22-1111 (B) PROVIDE PAYMENT FOR ANY COVERED AND UNDISPUTED ITEMS
WITHIN THIRTY DAYS AFTER RECEIVING THE INVENTORY
.
(II) THE COMMISSIONER SHALL ADOPT RULES TO SIMPLIFY THE
PROCESS FOR POLICYHOLDERS TO SUBMIT AN INVENTORY FOR PERSONAL
PROPERTY LOSSES AND EXPEDITE REIMBURSEMENT FOR SUCH LOSSES
.
(d) P
ROVIDE PAYMENT FOR COVERED COSTS ASSOCIATED WITH THE
REMOVAL OF DEBRIS WITHIN SIXTY DAYS AFTER RECEIVING AN INVOICE
,
RECEIPT, OR OTHER DOCUMENTATION INDICATING THE DATE AND COST OF
THE REMOVAL OF THE DEBRIS
; EXCEPT THAT, IN CASES WHERE DEBRIS
REMOVAL IS CONDUCTED BY
, OR IN COORDINATION WITH, GOVERNMENTAL
ENTITIES
, PAYMENT FOR COVERED COSTS FOR REMOVAL OF DEBRIS WILL BE
PROVIDED WITHIN A REASONABLE AMOUNT OF TIME
; AND
(e) PROVIDE PAYMENT FOR ANY COVERED LOSS OF TREES , SHRUBS,
AND LANDSCAPING WITHIN THIRTY DAYS AFTER THE INSURER RECEIVES
DOCUMENTATION OF SUCH LOSS
, SUCH AS DOCUMENTATION FROM A
REPUTABLE LANDSCAPING COMPANY
, SHOWING THE NUMBER AND NATURE
OF TREES
, SHRUBS, AND LANDSCAPING FEATURES DAMAGED OR DESTROYED .
(15) T
HE COMMISSIONER MAY ADOPT RULES AS NECESSARY FOR
WILDFIRE DISASTERS THAT THE GOVERNOR DECLARES PURS UANT TO SECTION
24-33.5-704 AND FOR THE IMPLEMENTATION OF SUBSECTIONS (13) AND (14)
OF THIS SECTION.
SECTION 2. Appropriation. (1) For the 2022-23 state fiscal year,
$66,781 is appropriated to the department of regulatory agencies for use by
the division of insurance. This appropriation is from the division of
insurance cash fund created in section 10-1-103 (3), C.R.S. To implement
this act, the division may use this appropriation as follows:
(a) $59,231 for personal services, which amount is based on an
assumption that the division will require an additional 1.0 FTE; and
(b) $7,550 for operating expenses.
SECTION 3. Act subject to petition - effective date -
applicability. (1) This act takes effect at 12:01 a.m. on the day following
the expiration of the ninety-day period after final adjournment of the
PAGE 7-HOUSE BILL 22-1111 general assembly; except that, if a referendum petition is filed pursuant to
section 1 (3) of article V of the state constitution against this act or an item,
section, or part of this act within such period, then the act, item, section, or
part will not take effect unless approved by the people at the general
election to be held in November 2022 and, in such case, will take effect on
the date of the official declaration of the vote thereon by the governor.
(2) This act applies to the offer, issuance, and renewal of property
PAGE 8-HOUSE BILL 22-1111 and casualty insurance policies in the state and to the administration of
claims pursuant to such policies on and after the applicable effective date
of this act.
____________________________ ____________________________
Alec Garnett Steve Fenberg
SPEAKER OF THE HOUSE PRESIDENT OF
OF REPRESENTATIVES THE SENATE
____________________________ ____________________________
Robin Jones Cindi L. Markwell
CHIEF CLERK OF THE HOUSE SECRETARY OF
OF REPRESENTATIVES THE SENATE
APPROVED________________________________________
(Date and Time)
_________________________________________
Jared S. Polis
GOVERNOR OF THE STATE OF COLORADO
PAGE 9-HOUSE BILL 22-1111