February 8, 2012
(Denver) – Voting against Colorado consumers, House Republicans have defeated a bill to close loopholes in casualty insurance policies sold in the state.
The measure, sponsored by Rep. Claire Levy (D-Boulder), died on a 6-5 party-line vote today in the House Local Government Committee.
The bill, HB12-1057, was spurred by the Fourmile Canyon fire, a 2010 blaze that destroyed more than 150 homes in Rep. Levy’s district in the hills west of Boulder. Several victims of that fire told the committee today that what their insurance agents assured them was adequate insurance fell far short of covering their losses.
Rep. Levy’s bill would have directed insurance companies to certify that the computer models they use to calculate replacement cost accurately reflect local construction costs. It also would have directed insurance companies to offer extra features on their policies and let their policyholders know that better coverage is available.
In answer to assertions that the bill would drive insurers out of the state, Rep. Levy emphasized that the bill doesn’t require insurance companies to pay more than they are contractually obliged to, or to guarantee that the homeowner has the right amount of coverage.
“Is there a reason for insurance companies to leave the state?” she asked. “No. They’ll be selling what they claim that they’re selling. And if they’re not going to sell that, they shouldn’t pretend that they are.”