In 2020 and 2021 Colorado experienced extremely damaging wildfires, with the Marshall and Middle Fork fires of 2021 being the most devastating fires in state history. Because of the large number of properties damaged and the extensive need for labor, materials, and alternate residences while repairs are being made, the department recognizes that insureds will likely need extensions on deadlines for repairs to the property.

The department has issued an emergency regulation effective April 27, 2023, to address these issues with all insurers issuing homeowner policies with claims resulting from the catastrophic disasters in the state. In the event of a catastrophic disaster, insurers shall do the following:

• Waive waiting periods for ALE benefits for policyholders whose residence needs repair/replacement or if the policyholder permanently relocates.
• Act in good faith and consider any adverse circumstances beyond the insured's control that might extend timelines listed in the policy.
• Take into account circumstances such as labor and material shortages, and other circumstances affecting the claim.
• If the policyholder has acted in good faith with reasonable diligence, the insurer shall also act in good faith to maintain or toll time limits when needed to protect policyholders.

In the event of a catastrophic disaster, if an insurer causes an unreasonable delay in the settlement of a claim, the insurer is required to:

• Toll the ALE time limits for the duration of the time needed to repair/replace the damaged property.
• Toll the policy time limits for the policyholder to repair/replace the damaged property in order to receive the replacement cost value payment.

In the event of a catastrophic disaster, if the insurer has caused delays in providing the initial estimate of damages and/or the actual cash value payment, the insurer shall act in good faith and toll the time period the policyholder can receive ALE benefits and collect the recoverable depreciation by the amount of time equal to the delayed action by the insurer. For example, if the insurer delays getting the initial estimate done by 30 days, then the insured gets ALE extended for an additional 30 days and has an extra 30 days to make repairs in order to receive the recoverable depreciation.

If in the event of a catastrophic disaster an insurer fails to toll policy time limits for ALE or recoverable depreciation beyond policy time period limits after causing an unreasonable delay in the settlement of a claim, that action may be constitute an unfair claim settlement practice. Noncompliance with this emergency order may result in the imposition of sanctions by the department. A copy of the order may be found here.