The desire to compensate shareholders creates a direct conflict of interest between insurance carriers and their policyholders. As a result, most jurisdictions, including Colorado, have enacted laws to protect their consumers and hold insurance carriers accountable to their promise to timely pay and to fully indemnify policyholders. States have also enacted laws allowing licensed adjusters to work directly for consumers to assist in ensuring recovery of all benefits that may be owed under a first-party property insurance policy. These adjusters are called “public adjusters.” These public adjusters are licensed and regulated by the State of Colorado. In Colorado, the leading public adjusting organization is the Rocky Mountain Association of Public Insurance Adjusters.

It is no secret that Colorado policyholders are aggravated with the handling of the recent wildfires by insurance carriers. Merlin Law Group’s Denver office receives phone calls weekly from homeowners expressing frustration with insurance carriers failing to provide coverage for the reasonable square footage price for a rebuild, misrepresenting additional living expenses coverage, refusing to test homes and businesses for soot and ash prior to terminating additional living expense coverage, delaying personal inventory monies, and of course, the “rotating” doors of insurance carrier adjusters handling a single claim.

Colorado’s Insurance Commissioner Michael Conway and the Colorado Division of Insurance have been flooded with the same types of phone calls and complaints, with Colorado homeowners filing over fifty-four complaints within the first two months of the Marshall Fire. Fortunately, Commissioner Conway has proven to be an advocate for Colorado’s consumers, even in the difficult landscape of maneuvering through the insurance industry’s lobbyists.

On March 14, 2022, Commissioner Conway’s Division asked sixty-five insurance companies to step up and do better through five specific requests:

1. For smoke, soot and ash claims: Regarding the repair and testing for smoke, soot and ash, along with extending ALE coverage until necessary cleaning, testing and repairs are complete

A) Inspect the home when smoke, soot and ash are visible. Repairs / cleaning / replacement as necessary of hard surfaces, HVAC systems, attic insulation and soft goods.

B) If there is a question of habitability after cleaning, insurance company should offer independent testing at the insurer’s cost. ALE continued until any testing and necessary remediation is complete.

2. For total losses, a contents coverage (Coverage C) payout of no less than 60% without requiring inventory (for owner-occupied, primary residences).

3. Provide options for streamlining inventory documentation for total losses for those eligible for additional replacement cost benefits from their policy, including: inventory forms that allow grouping by category, itemizing large items; and grouping by room or individual interviews with the policyholders.

4. Individual claims filed in the declared disaster area as defined by the State of Colorado Disaster Declaration issued on December 30, 2021, will be treated as a single fire loss with one deductible.

5. No future adverse underwriting actions will be taken based in whole or in part on a claim filed as a result of the Marshall Fire and Straight Line Winds event associated with the Colorado disaster declaration issued by Governor Polis on December 30, 2021.

Since Commissioner Conway issued these requests, all sixty-five insurance companies have agreed to inspect the home when smoke, soot and ash are visible and to provide (with the exception of the five Farmers Group companies) additional living expense until the testing and remediation has been completed. With the exception of State Farm, each of the other sixty-four insurance carriers have agreed to streamline inventory documentation for total losses for those eligible for additional replacement cost benefits from their policy, including: inventory forms that allow grouping by category, itemizing large items, and grouping by room or individual interviews with the policyholders. For those involved and affected by the East Troublesome and Marshall Fire loss claims, State Farm’s refusal to agree most likely does not surprise you. The specific responses of each insurance carrier can be accessed from the Boulder County Fires Consumer Advisory publication by the Division of Insurance.

The Rocky Mountain Association of Public Insurance Adjusters is holding its Spring 2022 Seminar Conference on April 14-15 in Denver, Colorado, where Commissioner Conway will be in attendance. Commissioner Conway is not anti-insurer and has expressed his respect and understanding for the need for a healthy insurance market. However, as a policyholder advocate, Commissioner Conway’s leadership in participating in discussions with both insurance carriers and policyholder advocates is much appreciated and deserves everyone’s respect.

Denver based attorney Jonathan Bukowski, and I, recently spoke with Brett Allen, the chairperson for External Relations for the Rocky Mountain Association of Public Insurance Adjusters, regarding Commissioner Conway’s attendance at the Spring 2022 Seminar Conference:

As a board member of RMAPIA and the chairperson for External Relations, I can’t emphasize how thankful we are to Commissioner Conway for attending and presenting at our spring conference. I want to thank Commissioner Conway and his staff for taking the time to show we are all working for policyholders’ best interests. The outstanding positive and constructive support shows DORA’s commitment to help all policyholders in the State of Colorado.

-Brett Allen

Chip Merlin teaches we should all be willing to listen to the opposing view and always try to work with the opposing side to try and help the policyholder. After all, the policyholder is both our client and the insurance carrier’s client. We look forward to hearing from Commissioner Conway this week.