Colorado Adopts Emergency Rule Extending Homeowners' Catastrophe Claims

Colorado Adopts Emergency Rule Extending Homeowners' Catastrophe Claims

On September 2, 2022, the Colorado Department of Regulatory Agencies, Division of Insurance, distributed a Notice of Adoption for Emergency Regulation 22-E-16 related to tolling certain time limits of policyholder benefits in the event of a catastrophic disaster. The rule became effective on September 3, 2022.

Emergency Regulation 22-E-16 was implemented to protect homeowner policyholders who have suffered a loss during a catastrophic disaster, such as the 2020 Colorado East Troublesome Fire and the 2021 Marshall and Middle Fork Fires. Among other things, in the event of a catastrophic disaster, the rule requires insurers to:

  • Act in good faith and consider any adverse circumstances beyond the insured’s control that may require maintaining and extending policyholder
    benefits beyond those afforded by the timelines in the underlying insurance policy; and
  • Waive any waiting periods related to ALE benefits for those policyholders whose residence requires repair or replacement or if the policyholder permanently relocates.

Additionally, where an insurer causes an unreasonable delay in the settlement of a claim, the insurer shall:

  • Toll the ALE time limits for the duration of the time required to repair or replace the damaged property; and
  • Toll the policy time limits for the policyholder to complete the repair or replacement of the damaged part of the property necessary for issuance of the replacement cost value payment.

This emergency rule replaces Emergency regulation 22-E-01, which became effective January 7, 2022, in its entirety. It also replaces Emergency Regulation 22-E-09, which became effective May 6, 2022.


Link to Emergency Regulation 22-E-16

Link to Notice of Adoption