2023 Colorado Revised Statutes › Title 10 - INSURANCE (§§ 10-1-101 — 10-23-110) › PROPERTY AND CASUALTY INSURANCE (§§ 10-4-101 — 10-4-1909) › Article 4 - PROPERTY AND CASUALTY INSURANCE (§§ 10-4-101 — 10-4-1909) › Part 1 - GENERAL (§§ 10-4-101 — 10-4-123) › Section 10-4-110.8 - Homeowner's insurance - prohibited and required practices - estimates of replacement value - additional living expense coverage - copies of policies - personal property contents coverage - inventory of personal property - requirements concerning total loss scenarios resulting from wildlife disasters - definitions - rules

(1)
An insurer may not cancel or fail to renew coverage of an insured solely because the insured inquires about coverage for homeowner's insurance and the inquiry is not related to an actual claim to the property insured.
(2)
An insurer may only provide information regarding claims to an entity that compiles or monitors personal claim or loss experience shared by insurers for underwriting or rating purposes.
(3)
As used in this section, unless the context otherwise requires:
(a)
"Additional living expense coverage" or "ALE" covers increased living expenses during the time required to repair or replace damage to the policyholder's dwelling unit following an insured loss or, if the policyholder permanently relocates, the time required to move the policyholder's household to a new location.
(b)
"Claim" includes a demand for payment of a benefit by the insured, the payment of a covered benefit by an insurer, a loss reserve established by the insurer, a loss adjustment expense incurred by the insurer, or a payment made to the insured.
(c)
"Dwelling" means a single-family home, other than a mobile home, condominium, or manufactured home, that is used as a primary residence by the owner of the dwelling.
(d)
"Extended replacement cost coverage" pays a designated amount above the policy limit to replace a damaged structure if necessary under current building conditions.
(d.7)
"Inflation protection coverage" means coverage that provides automatic adjustments of the coverage amount on the dwelling or structure being insured to protect against the impact of inflation.
(e)
"Inquiry" means a request for information regarding the terms, conditions, or coverages afforded under an insurance contract.
(f)
"Law and ordinance coverage" means coverage for increased costs of demolition, construction, renovation, or repair associated with the enforcement of building ordinances and laws.
(g)
(I)
"Owner-occupied residence" means a residence that is occupied primarily for the use of the owner and the owner's designees.
(II)
"Owner-occupied residence" includes, but is not limited to, an owner-occupied primary residence.
(III)
"Owner-occupied residence" does not include any property that is insured under a commercial insurance or agribusiness policy.
(h)
"Recoverable depreciation" means the difference between the cost to replace insured property and the actual cash value of the property.
(i)
"Wildfire" means a rapidly spreading fire that is difficult to bring under control in an area that includes combustible vegetation, such as trees, grass, brush, or bushes, which fire causes widespread or severe damage to property, regardless of the original source of ignition of the fire.
(4)
Every insurer issuing a policy of homeowner's insurance shall comply with section
10-3-1104(1)(h)
and all other provisions of part 11 of article
3
of this title.
(5)
(a)
In a common interest community, as defined in section
38-33.3-103(8)
, C.R.S., a unit owner may file a claim against the policy of the unit owner's association to the same extent, and with the same effect, as if the unit owner were a named insured if the following conditions are met:
(I)
The unit owner has contacted the executive board or the association's managing agent in writing, and in accordance with any applicable association policies or procedures for owner-initiated insurance claims, regarding the subject matter of the claim;
(II)
The unit owner has given the association at least fifteen days to respond in writing, and, if so requested, has given the association's agent a reasonable opportunity to inspect the damage; and
(III)
The subject matter of the claim falls within the association's insurance responsibilities.
(b)
The association's insurer, when determining premiums to be charged to the association, shall not take into account any request by a unit owner for a clarification of coverage.
(6)
(a)
(I)
Before issuance or renewal of a replacement-cost homeowner's insurance policy whose dwelling limit is equal to or greater than the estimated replacement cost of the residence, the insurer shall make available to an applicant the opportunity to obtain extended replacement-cost coverage and law and ordinance coverage. At a minimum, the insurer shall offer law and ordinance coverage in an amount of insurance equal to twenty percent of the limit of the insurance for the dwelling and extended replacement-cost coverage in an amount of insurance that is at least fifty percent of the limit of the insurance for the dwelling. Information provided must be accompanied by an explanation of the purpose, terms, and cost of these coverages. This subsection (6)(a) does not apply to any homeowner's insurance policy that already includes guaranteed replacement cost coverage, inflation protection coverage, extended replacement-cost coverage, or law and ordinance coverage in amounts greater than or equal to the amounts specified in this subsection (6)(a).
(II)
No later than January 1, 2025, and as prescribed by the commissioner by rule, the insurer shall:
(A)
List on the declaration page of the policy, in bold and in twelve-point type, whether a consumer purchased or rejected the additional coverages listed in this subsection (6)(a); and
(B)
Provide the premium cost associated with the rejected additional coverages listed in this subsection (6)(a) in a separate notice with the application or renewal of the policy.
(b)
All homeowner's insurance replacement cost policies for a dwelling must include additional living expense coverage. This coverage must be available for a period of at least twelve months and is subject to other policy provisions. Insurers shall offer policyholders the opportunity to purchase a total of twenty-four months of ALE coverage and give an applicant an explanation of the purpose, terms, and cost of this coverage. This paragraph (b) does not apply to any homeowner's insurance policy that already includes at least twenty-four months of ALE coverage as a standard provision.
(7)
(a)
The text of all endorsements, summary disclosure forms, and homeowner's insurance policies must not exceed the tenth-grade reading level, as measured by the Flesch-Kincaid grade level formula, or must not score less than fifty as measured by the Flesch reading ease formula. Insurers shall revise all homeowner's insurance policies issued or renewed in Colorado on or after January 1, 2015, to comply with this subsection (7). Thereafter, all homeowner's insurance policies must comply with this subsection (7).
(b)
For the purposes of this subsection (7):
(I)
A contraction, hyphenated word, or numbers and letters, when separated by spaces, count as one word;
(II)
A unit of words ending with a period, semicolon, or colon, but excluding headings and captions, count as a sentence; and
(III)
A syllable means a unit of spoken language consisting of one or more letters of a word as divided by an accepted dictionary. If the dictionary shows two or more equally acceptable pronunciations of a word, a pronunciation containing fewer syllables may be used.
(IV)
"Text" includes all printed matter except the following:
(A)
The name and address of the insurer; the name, number, or title of the policy; the table of contents or index; captions and subcaptions; and specification pages, schedules, or tables; and
(B)
Any policy language that is drafted to conform to the requirements of a federal law or regulation; any policy language required by a collectively bargained agreement; any medical terminology; any words that are defined in the policy; and any policy language required by law or regulation if the insurer identifies the language or terminology excepted and certifies in writing that the language or terminology is entitled to be excepted.
(8)
[Effective until 1/1/2025]
The insurer must consider, subject to the insurer's underwriting requirements, an estimate from a licensed contractor or licensed architect submitted by the policyholder as the basis for establishing the replacement cost of a dwelling.
(8)
[Effective 1/1/2025]
The insurer must consider the following factors as a basis for establishing the reconstruction cost of a dwelling:
(a)
The reconstruction cost estimated from the annual report prepared pursuant to section 10-1-144;
(b)
The reconstruction cost estimating software used and the software estimate;
(c)
Specific reconstruction expenses, including:
(I)
Labor, building materials, and supplies;
(II)
A contractor's overhead and profit;
(III)
Demolition and debris removal;
(IV)
Cost of permits and architect's plans and fees; and
(V)
Features of the structure, including:
(A)
The foundation type;
(B)
The type of frame;
(C)
Roofing materials and type of roof;
(D)
Siding materials and type of siding;
(E)
Square footage;
(F)
Number of stories;
(G)
Any wall heights that are not standard;
(H)
Interior features and finishes, such as the heating and air conditioning system, walls, flooring, ceiling, fireplaces, kitchen, and bathrooms;
(I)
The age of the original structure or the year of the original structure's construction; and
(J)
The size and type of any attached garage; and
(d)
An estimate from a contractor or an architect licensed pursuant to article 120 of title 12, if submitted by the policyholder.
(9)
At renewal of a homeowner's insurance policy, the insurer shall provide written notification to the policyholder describing changes in insurance policy language that are applicable to that renewal period.
(9.5)
(a)
At application and renewal of a replacement cost homeowner's insurance policy for a dwelling that is issued or renewed on and after January 1, 2025, the insurer shall:
(I)
Provide the applicant or policyholder with an estimate of the cost necessary to reconstruct the covered structure;
(II)
Disclose to the applicant or policyholder, in a form and manner prescribed by the commissioner by rule:
(A)
How the estimate was calculated, taking into account the factors listed in subsection (8) of this section; and
(B)
The reconstruction costs for homes as detailed in the annual report required in section 10-1-144 for the same geographic area of the insured's home;
(III)
Provide copies of any generated estimates from any software or tools or services used by the insurer to establish the reconstruction costs;
(IV)
Provide the applicant or policyholder with the web address of, or a link to, the report prepared pursuant to section 10-1-144; and
(b)
An insurer otherwise subject to this subsection (9.5) does not have to comply with the requirements of this subsection (9.5) if:
(I)
Within the two years prior to the offer of renewal of the homeowner's insurance policy, the policyholder has requested and the insurer has provided coverage limits greater than the limits previously selected by the policyholder; or
(II)
In connection with its annual offer to renew the policy, the insurer has offered the policyholder, on an every-other-year basis, the right to recalculate the reconstruction cost estimate and the policy includes Inflation protection coverage.
(10)
Every homeowner's insurance carrier shall make available to a policyholder an electronic or paper copy of the policyholder's insurance policy, including the declaration page and any endorsements, within three business days after a request from the policyholder. The policyholder shall determine the method of delivery. Every homeowner's insurance carrier shall make available to a policyholder a certified copy of the policyholder's insurance policy within thirty days after a request from the policyholder.
(11)
(a)
In the event of a total loss of the contents of an owner-occupied primary residence that was furnished at the time of loss, the insurer shall offer the policyholder a minimum of thirty percent, or a larger percent by mutual agreement of the policyholder and insurer, of the value of the contents coverage reflected in the declaration page of the homeowner's policy without requiring submittal of a written inventory of the contents. In order to receive up to the full value of the contents coverage, the policyholder may accept the offer under this paragraph (a) and submit a written inventory as required by the insurer.
(b)
If the policyholder receives the depreciated value of contents insured under a policy, the insurer must make available to the insured the methodology used for determining the depreciated value of the insured contents.
(c)
(I)
An insurer shall allow the policyholder at least three hundred sixty-five days after a total loss claim to submit an inventory of lost or damaged property.
(II)
An insurer shall allow the policyholder at least three hundred sixty-five days after expiration of ALE to replace property and receive recoverable depreciation on that property.
(12)
(a)
Notwithstanding any provision of a homeowner's insurance policy that requires the policyholder to file suit against the insurer, in the case of any dispute, within a period of time that is shorter than required by the applicable statute of limitations provided by law, a homeowner may file such a suit within the period of time allowed by the applicable statute of limitations; except that this paragraph (a):
(I)
Does not revive a cause of action that, as of May 10, 2013, has already been barred by contract; and
(II)
Applies only to a cause of action that, as of May 10, 2013, has not been barred by contract.
(b)
On and after January 1, 2014, an insurer shall not issue or renew a homeowner's insurance policy that requires the policyholder to file suit against the insurer, in the case of any dispute, within a period of time that is shorter than required by the applicable statute of limitations provided by law.
(13)
In offering, issuing, or renewing a homeowner's insurance policy in this state, an insurer shall comply with the following minimum requirements concerning coverage provided under the policy to policyholders to protect them from damages that occur in the event of a total loss of an owner-occupied residence, including the contents of the owner-occupied residence, which loss occurs as a result of a wildfire disaster that the governor declares pursuant to section
24-33.5-704
:
(a)
A policy of homeowner's insurance may not limit or deny a payment of the building code upgrade cost or a payment of any extended replacement cost available under the policy coverage for a policyholder's structure that was a total loss on the basis that the policyholder decided to rebuild in a new location or to purchase an existing structure in a new location if the policy otherwise covers the replacement cost or building code upgrade cost; except that the measure of indemnity may not exceed the replacement cost, including the upgrade costs and extended replacement cost for repairing, rebuilding, or replacing the structure at the original location of the loss.
(b)
If a policy of homeowner's insurance requires a policyholder to repair, rebuild, or replace damaged or lost property in order to collect the full replacement cost for the property, the insurer, subject to the policy limits, shall:
(I)
Allow the policyholder at least thirty-six months to submit receipts and invoices for the replacement costs of the insured owner-occupied residence, which period begins on the date upon which the insurer provides the initial payment toward the actual cash value of the damage or loss; and
(II)
Provide that, in addition to the period described in subsection (13)(b)(I) of this section, the policyholder has the option to twice extend such period by six months if the policyholder, acting in good faith and with reasonable diligence, encounters unavoidable delays in obtaining a construction permit, lacks necessary construction materials, lacks available contractors to perform necessary work, or encounters other circumstances beyond the policyholder's control. This subsection (13)(b)(II) does not prohibit an insurer from allowing a policyholder additional time to collect the full replacement cost for lost or damaged property or for additional living expenses.
(c)
The policy must include additional living expense coverage to apply in the event of such a loss. Notwithstanding subsection (6)(b) of this section, additional living expense coverage must be available for a period of at least twenty-four months, and the insurer shall offer the policyholder the opportunity to twice extend such period by six months if the policyholder, acting in good faith and with reasonable diligence, encounters a delay or delays in receiving necessary permit approvals for, or reconstruction of, the insured owner-occupied residence, which delays are beyond the control of the policyholder.
(d)
The policy must provide that, notwithstanding subsection (11)(c) of this section, to replace personal property and receive recoverable depreciation on that property, an insurer shall allow the policyholder the greater of:
(I)
At least three hundred sixty-five days after the expiration of ALE; or
(II)
Thirty-six months after the insurer provides the policyholder the first payment toward the actual cash value of such loss.
(e)
The policy must provide that the insurer will pay the policyholder for the loss of use of the insured property within twenty days after the insurer receives documentation of such loss, which documentation may include a signed lease that obligates the policyholder to pay for temporary replacement housing; except that:
(I)
If a policyholder provides a signed lease as documentation, the insurer may pay the policyholder in monthly or other increments, in accordance with the terms of the lease; and
(II)
Alternatively, an insurer may provide advance rent payments for housing for the policyholder, family members, livestock, and pets, as necessary.
(f)
The policy must provide that the policyholder may either:
(I)
Replace the insured owner-occupied residence at the current location or another location, in either of which case the calculation of the replacement cost of the insured owner-occupied residence shall not include consideration of the value of the land upon which the replacement residence is located; or
(II)
Use the proceeds from the policy to purchase an existing residence at a new location, in which case the calculation of the replacement cost of the insured owner-occupied residence shall not include consideration of the value of the land upon which the existing residence is located.
(g)
The policy must allow a policyholder to use claims payments resulting from coverage against the loss of outbuildings, dwelling extensions, and other structures to pay the costs of a replacement residence if the coverage limit that applies to the policyholder's owner-occupied residence is insufficient to pay for rebuilding or replacing the owner-occupied residence. Any claims payments for losses pursuant to this subsection (13)(g) for which replacement cost coverage is applicable shall be for the full replacement value of the loss without requiring actual replacement of the other structures. Claims payments for other structures in excess of the amount applied toward the necessary cost to rebuild or replace the damaged or destroyed dwelling shall be paid according to the terms of the policy.
(h)
Within a reasonable amount of time after receiving a claim under an issued policy, an insurer shall provide to the policyholder:
(I)
Appropriate contact information that allows for direct contact with either an employee of the insurer or a representative who is capable of elevating complaints or inquiries to an employee of the insurer;
(II)
At least one means of communication during regular business hours; and
(III)
A written status report if, within a six-month period, the policyholder is assigned a third or subsequent adjuster to be primarily responsible for a claim. The written status report must include a summary of any decisions or actions that are substantially related to the disposition of a claim, including the amount of losses to structures or contents, the retention or consultation of design or construction professionals, the amount of coverage for losses to structures or contents, and all items of dispute.
(14)
If a homeowner's insurance policyholder experiences a total loss of the contents of an owner-occupied residence that was documented as being furnished at the time of loss as a result of a wildfire disaster that is declared by the governor pursuant to section
24-33.5-704
, the insurer shall:
(a)
Notwithstanding subsection (11)(a) of this section, offer the policyholder a minimum of sixty-five percent, or a larger percent by mutual agreement of the policyholder and insurer, of the limit of the contents coverage indicated in the declaration page of the policy without requiring the policyholder to submit a written inventory of the contents;
(b)
Notify the policyholder that:
(I)
Acceptance of the money described in subsection (14)(a) of this section does not change the benefits available under the policy;
(II)
Additional money may be available if the policyholder submits an inventory; and
(III)
The insurer is required, pursuant to subsection (11)(b) of this section, to disclose its methodology for determining the depreciated value of the contents of insured property;
(c)
(I)
If the policyholder submits an inventory of personal property losses in an amount that exceeds the amount paid to the policyholder pursuant to subsection (14)(a) of this section:
(A)
Request any additional information concerning the inventory no later than thirty days after receiving the inventory; and
(B)
Provide payment for any covered and undisputed items within thirty days after receiving the inventory.
(II)
The commissioner shall adopt rules to simplify the process for policyholders to submit an inventory for personal property losses and expedite reimbursement for such losses.
(d)
Provide payment for covered costs associated with the removal of debris within sixty days after receiving an invoice, receipt, or other documentation indicating the date and cost of the removal of the debris; except that, in cases where debris removal is conducted by, or in coordination with, governmental entities, payment for covered costs for removal of debris will be provided within a reasonable amount of time; and
(e)
Provide payment for any covered loss of trees, shrubs, and landscaping within thirty days after the insurer receives documentation of such loss, such as documentation from a reputable landscaping company, showing the number and nature of trees, shrubs, and landscaping features damaged or destroyed.
(15)
The commissioner may adopt rules as necessary to implement this section, including rules regarding:
(a)
The information that insurers must consider in estimating reconstruction costs;
(b)
The use of reconstructing cost estimator tools and services; and
(c)
The requirements to provide information in the summary disclosure form to consumers that explains replacement cost coverage, actual cash value coverage, and the ability of consumers to purchase affordable coverage.
(16)
(a)
An insurer shall not refuse to issue, cancel, refuse to renew, or increase a premium or rate for a homeowner's insurance policy or a dwelling fire insurance policy based on the breed or mixture of breeds of dog that is kept at the dwelling.
(b)
This subsection (16) does not prohibit an insurer from refusing to issue, cancelling, refusing to renew, or imposing a reasonable increase to a premium or rate for a homeowner's insurance policy or a dwelling fire insurance policy based on sound underwriting and actuarial principles on the basis that a particular dog kept at the dwelling is known to be dangerous or has been declared to be dangerous in accordance with section 18-9-204.5.
(c)
An insurer may not ask or otherwise inquire about the specific breed or mixture of breeds of dog that is kept at the dwelling except to ask if the dog is known to be dangerous or has been declared to be dangerous in accordance with section 18-9-204.5.
(d)
For the purposes of this subsection (16), "dwelling" includes a dwelling unit as defined in section 38-12-502 (3).
Amended by 2023 Ch. 416,§ 2, eff. 1/1/2024.
Amended by 2023 Ch. 168,§ 3, eff. 8/7/2023 (except (8) effective 1/1/2025.
Amended by 2022 Ch. 305, § 1, eff. 8/10/2022.
Amended by 2013 Ch. 183, § 2, eff. 5/10/2013 and 1/1/2014.
L. 2004: Entire section added, p. 1972, § 3, effective August 4; entire section added, p. 1981, § 2, effective 1/1/2005. L. 2005: (3) and (4) amended and (5) added, p. 1390, § 20, effective 1/1/2006. L. 2006: (5) amended, p. 1226, § 16, effective May 26. L. 2013: (12) added, (HB 13-1225), ch. 672, p. 672, § 2, effective May 10; (3) amended and (6) to (11) added, (HB 13-1225), ch. 672, p. 672, § 2, effective 1/1/2014. L. 2022: IP(3) and (3)(g) amended and (3)(h), (3)(i), (13), (14), and (15) added, (HB 22-1111), ch. 2204, p. 2204, § 1, effective August 10. L. 2023: (3)(d.7) and (9.5) added and (6)(a) and (15) amended, (HB 23-1174), ch. 820, p. 820, § 3, effective August 7; (16) added, (HB 23-1068), ch. 2463, p. 2463, § 2, effective 1/1/2024; (8) amended, (HB 23-1174), ch. 820, p. 820, § 3, effective 1/1/2025.
2023 Ch. 416, was passed without a safety clause. See Colo. Const. art. V, § 1(3).
2023 Ch. 168, was passed without a safety clause. See Colo. Const. art. V, § 1(3).
(1) In 2013, subsection (3) was amended and subsections (6) to (12) were added by the "Homeowner's Insurance Reform Act of 2013". For the short title, see section 1 of chapter 183, Session Laws of Colorado 2013. (2) For the legislative declaration in HB 23-1068, see section 1 of chapter 416, Session Laws of Colorado 2023.