🔥 New Emergency Regulation for Property Claims: Colorado

As of January 7th, 2022, a Colorado Division of Insurance Regulation came into effect to protect Homeowners with claims from catastrophic disasters.

A burning building
Wildfires affecting Colorado from 2020 through the present have resulted in historic losses.

Table of Contents:

About the Emergency Regulation

Are businesses and other property owners covered, too?

Resources for Colorado Policyholders


About the Emergency Regulation


With Colorado property owners fighting for recovery from wildfires from 2020-present, combined hazardous winter weather, building material shortages, and more, the Colorado Department of Insurance Commissioner issued a notice for the following:


Emergency Regulation 22-E-01 CONCERNING TOLLING CERTAIN TIME LIMITS OF POLICYHOLDER BENEFITS IN THE EVENT OF A CATASTROPHIC DISASTER

"The purpose of this emergency regulation is to protect homeowner policyholders who have suffered a loss during a catastrophic disaster, such as the 2020 Colorado East Troublesome Fire and the 2021 Marshall and Middle Fork Fires, from insurers that cause unreasonable delays in claim handling, which may further delay rebuilding property. Such delays may be further exacerbated by labor and material shortages. Further, this regulation identifies specific acts or practices that may constitute unfair claim settlement practices."

In regards to tolling, a type of claim extension, the notice states:

"In the event of a catastrophic disaster, where an insurer causes an unreasonable delay in the settlement of a claim, the insurer shall: 1. Toll the ALE time limits for the duration of the time required to repair or replace the damaged property. 2. Toll the policy time limits for the policyholder to complete the repair or replacement of the damaged part of the property necessary for issuance of the replacement cost value payment."

View the full notice here.


This order will not only be helpful to policyholders regarding Additional Living Expenses (ALE) benefits, but also for Replacement Cost Coverage benefits, allowing policyholders to recover something called Recoverable Depreciation. Recoverable Depreciation is typically paid after the property has been repaired or rebuilt, and has specified time limits in which a policyholder is eligible to recover these benefits. Recoverable Depreciation deadlines are often an issue in property claims, even without a catastrophic loss, or building material shortages, delays, and price increases.


Shortages for building materials and the construction professionals needed to repair and rebuild properties are common in post-disaster areas, as a result of sudden and acute demand sapping material inventories and labor in the area. Price increases happen as well. Adding to this common occurrence, policyholders with open property insurance claims have experienced claim handling, settlement, and payment delays, and historic raw/building material shortages and supply chain issues, production backups, labor shortages, and price increases since 2020. All of this is a result of the worldwide COVID-19 pandemic.

Read more: JS Held report - Empirical Productivity Impacts of the Novel Coronavirus


A phrase used in the notice was "where an insurer causes an unreasonable delay in the settlement of a claim[...]". A good question is: who determines when an insurer has caused an unreasonable delay, and how is the tolling then enforced? Policyholders may want to reach out to the Colorado Department of Insurance or a Colorado-licensed first party property claims attorney to find that answer.


Are Businesses and other Property Owners Covered, Too?


It is important to note that this emergency regulation highlights Homeowners policy coverages. Other types of policyholders such as businesses, institutions, and commercial and industrial property owners also have a long road of recovery ahead, and many will likely experience property insurance claim delays, issues, or disputes.


Overall, this Emergency Rule covers thousands of Colorado policyholders affected by wildfire losses, and is something to be celebrated.


Resources for Colorado policyholders:

🏠 United Policyholders - First Steps After a Wildfire

🏠 United Policyholders - State by State Help: Colorado

🦅 American Policyholder Association - Consumer guides for policyholders

⛰️ Colorado DORA, Division of Insurance - File an insurance claim complaint

Thank you, Commissioner Conway!


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