Reforming Home Insurance to Protect Coloradodans

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After years of Colorados struggling with their claims from wildfires and other natural disasters, insurance companies need a reminder from Colorado lawmakers about how group risk agreements are supposed to work.

And there’s a good start to that effort with House Bill 1111, which would require more comprehensive coverage from insurance companies during a declared fire, like the Marshall Fire that burned down more than 1,000 homes in the county of Boulder.

Colorado lawmakers have wondered how to protect homeowners from inadequate insurance coverage without causing insurance premiums to soar unsustainably for years. But despite efforts to alleviate the problem, reports from victims of the Marshall fire indicate that more needs to be done.

We disagree with Carole Walker, executive director of the Rocky Mountain Insurance Information Association, who urged caution going forward.

“Don’t go too far ahead before you put a nail in a board,” Walker told Noelle Phillips of the Denver Post for an article documenting the worries of homeowners who lost everything that their homes and belongings were significantly under-served. insured.

Granted, some of the extent of underinsurance is due to historic levels of pandemic-era home construction cost inflation, but the Denver Post and other news outlets statewide have been documenting issues of underinsurance for decades.

This is nothing new and we trust owners who believe they will be unable to rebuild for what their insurance policy is currently written for, although the gap may not be as severe as they are predicting it right now.

If an insurance agent tells a homeowner what the estimated replacement value of their home is, there must be a penalty if it’s different from a certain margin, and insurance companies must take it upon themselves. increase the estimated replacement costs at regular intervals (or decrease) as needed.

The flip side is that many homeowners will see their premiums go up, but the upside is of course that their home is properly insured. Homeowners need to start making more informed decisions and consider much higher deductibles for those who are able to self-insure for minor incidents – a new roof after a hailstorm, a home theft that hasn’t took only a few items, a broken window from a child’s baseball. Americans have become too dependent on their landlord’s policies for every small claim.

House Bill 1111 would in future require home insurance companies to provide additional living expenses for up to 36 months in the event of a declared fire, and providers must offer homeowners the option to purchase more time up to a total of 48 months.

The bill would give those who have suffered complete losses from a catastrophic fire much-needed time to file claims for the construction of their new home and the replacement of their personal property.

We fear it may already be too late for those who lost their homes in the Marshall Fire, but if lawmakers act this session to add sensible reforms to the insurance industry, the next natural disaster in Colorado will find owners much better off.

—Megan Schrader for Denver Post Editorial Board

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