Less than two months after Coloradans suffered the state’s most destructive wildfire in history, lawmakers are trying to change the way insurance companies handle wildfire losses.

If passed, House Bill 1111 would increase the amount of lost property insurance providers have to cover upfront and extend the timeframe victims have to rebuild their homes. The proposed changes would only apply to future declared fire disasters, which would not help the victims of the Marshall fire that destroyed more than 1,000 Boulder County homes in December.

Sponsor Rep. Judy Amabile, D-Boulder, said the bill was inspired by the East Troublesome fire, the second-largest wildfire in state history which burned 193,812 acres in Grand County in October 2020. Colorado’s first- and third-largest wildfires also burned across the state that same year. 

“We heard from a lot of people that they suffered a second trauma after losing their homes. That trauma was figuring out how to get their claims processed and how to get paid what they felt they were owed,” Amabile said. “This bill won’t help the people in the Marshall fire and it won’t help the people in the East Troublesome fire, but it will help people in the next fire.”

During the bill’s first committee hearing Thursday, dozens of wildfire victims said increasing lost property coverage would be especially helpful. Under the bill, insurance providers would be required to cover at least 65% of the value of lost property upfront. Current law only requires 30% to be covered without the victims creating an inventory of their lost property, a process victims called unnecessarily difficult and traumatizing.

Jon Pratt lost his home in Grand Lake during the East Troublesome fire. A State Farm customer for 45 years, Pratt was forced to document every item in his home in order to receive more than 30% of the value — including every item’s age, condition, cost, where they were purchased and proof of purchase.

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“We’ve been put through hell. It took us eight months — my wife crying again and again and again — to document everything,” Pratt said. “4-ounce mustard, one full in the cabinet, one half-full in the refrigerator. Salt. Pepper. $1 items all the way up to $80,000 items. Then you submit it, and they don’t pay you.”

Pratt said it took over a year for him to settle his claim with State Farm after the company offered him a payment that was 50% of what they ended up settling on. He said the company ignored photos of the house, official quotes and plans for rebuilding and they are still in dispute over additional payments.

“We had to fight tooth and nail for every single nickel that we received,” Pratt said. “I talked to four lawyers over a one-year period and, along the way, everyone said the same thing: ‘Their goal is to pay as little, as slow as possible.’ I can attest to that. … This bill does not fix everything, but it goes a long way to moving things forward in the right direction.”

Other victims of the East Troublesome fire spoke of similar issues. One victim said their inventory totaled over $500,000, but 16 months later, they have only received $209,000. Another victim said his insurance company ignored photos and blueprints of his house and, two months after the fire, he had received no support or answers, despite others with different insurance providers having already been paid out and living in a rental home.

Mark Reinowski, who lost his home in the Marshall fire, said these insurance issues have not changed since the East Troublesome fire. Reinowski said his insurance company, Amica, only offered him 30% of content coverage without an inventory, while his neighbor’s insurance companies offered between 75% and 100% upfront without an inventory.

“(Those who lost their homes) didn’t know they’d have to fight for this,” Reinowski said. “It really is about bringing the bar up to the best practices that are already happening with some insurers in the industry and taking that anxiety off of the homeowners.”

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The bill would also require insurance companies to provide additional time for wildfire victims to rebuild their homes, covering victims’ living expenses and offering a primary point of contact. Currently, insurance companies only give victims 12 months to rebuild. Under the bill, victims would get a minimum of 24 months with two six-month extension opportunities. Victims could also rebuild in a different location or buy a new home instead.

Bob Hughes, a consultant of the Grand County Builders Association, called the current 12-month time limit “virtually impossible” due to shortages of housing, contractors and building materials in areas devastated by wildfires. Hughes, who lost his own home in the East Troublesome fire, came out of retirement to assist in rebuilding after the fire.

“Not one home in Grand County was rebuilt in that (12-month) time period. Out of 366, not one person was able to meet that criteria,” Hughes said. “Fewer than 10 homes will actually be completed in the 24-month limit.”

After more than three hours of testimony from wildfire victims and industry experts, the House business committee advanced the bill in a 10 to 2 vote, with Rep. Shane Sandridge, R-Colorado Springs, and Rep. Kevin Van Winkle, R-Highlands Ranch, voting no. 

Van Winkle said he was not sure the bill will properly address the issues that wildfire victims face regarding insurance. Many of the victims noted they’re happy to take any step towards creating a better system. Craig Swift, who lost his home in the Marshall fire, called the current system a “nightmare.”

“Insurance is supposed to be there to help us rebuild our lives when the unthinkable happens,” Swift said through tears, “not to make the process as painful and as difficult as possible.”

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