Colorado has been hit by major wildfires. There are not enough contractors to take care of the repairs. As a result, Colorado issued new rules to insurers regarding the handling of these claims.
The most important part of the Colorado Bulletin is the following:
Section 5 Rules
In the event of a catastrophic disaster, an insurer shall waive all waiting times related to ALE benefits for the policyholders whose home requires repair or replacement or if the policyholder moves permanently.
In the event of a catastrophic disaster, an insurer shall act in good faith and shall consider all adverse circumstances beyond the control of the insured which may require the benefits of the policyholder to be maintained and extended beyond those offered by the timelines of the underlying insurance. In order to determine whether certain benefits are to be extended, insurers must take into account all the circumstances affecting the claim, including, but not limited to, labor and material shortages and other circumstances affecting the claim but not directly caused by the catastrophic event. The division deals specifically with ALE benefits and time limits for repair or replacement for recyclable depreciation coverage. If the insured has acted in good faith and with reasonable accuracy, the insurers must also act in good faith to maintain or charge insurance periods when it is necessary to protect their policyholders.
In the event of a catastrophic disaster, where an insurer causes an unreasonable delay in the settlement of a claim, the insurer shall:
Remove the ALE time limits for the time required to repair or replace the damaged property.
2. Set the insurance period limits for the policyholder to complete the repair or replacement of the damaged part of the property that is necessary for the issue of the replacement cost value.
In the event of a catastrophic disaster, if the insurer has caused delays in providing the initial estimate of damages and / or the actual cash value, the insurer shall act in good faith and pay the period of time that the policyholder can recover ALE benefits and collect recoverable depreciation with a period of time corresponding to the insured̵
7;s delayed action.In the event of a catastrophic disaster, failure to pay insurance time limits for ALE or recoverable depreciation (RCV) beyond the limits of the insurance period, after causing an unreasonable delay in the settlement of a claim, may constitute an unfair practice for settlement claims.
Our experience is that most insurance companies provide extensions without this bulletin. But not all insurance companies do that. This bulletin and the new regulation are needed.
Today’s thoughts
Our peace must stand as rocky mountains.
—William Shakespeare
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