For years, I’ve been warning that insurance companies are quietly working to limit or deny coverage for smoke, soot, and ash damage even when those perils are clearly the result of a covered wildfire. Now, the Colorado Division of Insurance has issued a Bulletin that calls out the problem directly and tells insurers to stop it.
In Bulletin No. B-5.53, issued October 20, 2025, the Division made it clear that insurers cannot impose sublimits or carve-outs that reduce coverage for wildfire-related smoke, soot, ash, odor, or char damage. The Division stated that these losses are “direct extensions of wildfire damage,” and that limiting them “undermines the essential protection Colorado policyholders reasonably expect” to receive under their residential property policies.
This is a significant step in protecting homeowners from an alarming trend I’ve been writing about for years. In my earlier post, Smoke, Soot, and Ash Science and Clean-Up Remain a Hot and Concerning Insurance Adjustment Topic, I explained how insurers often downplay the extent of smoke and soot contamination even when scientific testing shows microscopic particles can make homes unsafe. In California Smoke, Soot, and Ash Claims: A Cause for Concern, I described how some insurers tried to manipulate policy language and claims practices to turn total losses into partial denials.
Now Colorado insurance regulators are drawing a line. They recognize that smoke and soot can make a home uninhabitable, damage HVAC systems, and cause lingering health hazards. The Division’s bulletin doesn’t mince words: it “expects insurers to refrain from including in their residential property policies such sub-limits and administer claims resulting from wildfire smoke, soot, ash, odor, and char damage accordingly.”
This directive matters far beyond Colorado. Insurers are testing the waters nationwide, quietly introducing “smoke sublimits” or vague exclusions that chip away at what used to be standard coverage. If regulators and policyholders don’t push back, these erosions will spread just like the wildfires themselves.
The science is clear. The damage is real. Insurance must at least fulfill its fundamental historical promise to make policyholders whole after a covered fire loss. I applaud the Colorado Division of Insurance for standing up to protect consumers and holding insurers to that promise.
Thought For The Day
“One may have a blazing hearth in one’s soul and yet no one ever comes to sit by it. Passers-by see only a wisp of smoke from the chimney and continue on their way.”
—Vincent van Gogh
