Consumer Protections from Homeowner Underinsurance Passes Committee

DENVER, CO - The House Business Affairs & Labor Committee today passed a bill to prevent Colorado homeowners from being underinsured in the event of property loss. The bill passed by a vote of 10-1.

“Coloradans shouldn’t be blindsided by the reality of their home insurance coverage after they’ve suffered devastating property loss,” said Rep. Judy Amabile, D-Boulder. “Our communities have experienced catastrophic wildfire damage in recent years, displacing thousands of people from their homes and saddling them with the responsibility of recovering with minimal financial assistance from their home insurance company. This bill prevents Coloradans from being under insured and allows them to choose a coverage option that provides them peace of mind.”

“Coloradans are being driven out of the community they know and love because they lost their home in a wildfire and can’t afford to rebuild,” said Rep. Kyle Brown, D-Louisville. “Many Coloradans believed they had enough home insurance coverage, but more than half of homeowners who lost their home in the Marshall fire didn’t have enough to rebuild. This bill helps our neighbors stay in their community and rebuild their life after devastation.”

HB23-1174 would require home insurance companies to offer a variety of coverages to protect them, covering the cost of repair or replacement for a damaged or destroyed structure. If a homeowner wants additional coverage, the insurer must offer coverage for extended replacement, law and ordinance, and inflation protection. It would also extend the length of time in which an insurer would have to notify a homeowner of a cancellation or refusal to renew a homeowner’s policy from 30 days to 60 days.

The Division of Insurance would contract with an independent third party to put together an annual report detailing reconstruction costs in every region of the state.

Representative Judy Amabile passed similar legislation in the 2022 Legislative Session in response to the Marshall Fire that destroyed over 1,000 homes in Boulder County. The bill ensured that homeowners received fair compensation for the loss of their property and streamlined the insurance claims process for underinsured disaster victims.