In December 2021, Colorado experienced the Marshall Fire, which was the worst fire in Colorado's history. It destroyed more than 1,000 residential and commercial structures, and in the aftermath, the towns of Louisville and Superior allowed insureds who had suffered damage to opt-out of certain sections of the local building codes. In light of that, the department has issued a new regulation concerning ordinance and law coverage, to be effective December 15, 2022.
The regulation applies to all insurers issuing homeowner policies that have damage claims and law and ordinance coverage is on the policy. There are six rules that now apply to these insurers.
Insurers will pay benefits to policyholders based on the policy terms and amounts insured by policyholders to rebuild their homes. Payments are to include all coverages owed under the primary structure limit and optional coverages, including ordinance and law.
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Christine G. Barlow, CPCU, is Executive Editor of FC&S Expert Coverage Interpretation, a division of National Underwriter Company and ALM. Christine has over thirty years’ experience in the insurance industry, beginning as a claims adjuster then working as an underwriter and underwriting supervisor handling personal lines. Christine regularly presents and moderates webinars on a variety of topics and is an experienced presenter.