California FireS: insurance tips as colorado recalls the marshall fire
California Insurance Commissioner Ricardo Lara banned insurance companies from canceling or not renewing polices for homeowners affected by the recent Palisades and Eaton fires.¹ Sadly, many homeowners learned before these fires that they could not be fully insured, or even insured at all.²
Coloradoans remember this all too well…there is nothing FAIR about insurance these days because its a complex issue as many homeowners are being dropped from coverage. As a resident of Boulder County myself and witness to the devastating Marshall Fire that roared through the unincorporated county and communities of Superior and Louisville, Colorado on December 30, 2021, the fire claimed homes regardless of a persons social, economic, or political status.
We learned that underinsurance was a critical issue, of the 61 homeowners’ insurance companies representing 97% of the market share of all companies selling homeowners’ insurance in Colorado, the Division of Insurance initially reported³;
A rebuild cost of $250 per square foot, that 36% policies were underinsured,
At $300 per square foot, 55% were underinsured,
At $350 per square foot, 67% were underinsured.
As climate change creates extremely drier conditions with 2024 being the warmest on record, it becomes essential for property owners to take proactive measures to prepare for a wildfire before it occurs by creating a defensible space or designing homes with passive fire protection features. Filing an insurance claim under any natural or technological disaster is a difficult and uncertain process for the individual person, let alone under circumstances where additional living expenses and fears mount in the weeks, months, and years following the crisis, meeting with your insurance carrier to review your policy before a disaster is a key to understanding your coverage.
Californians need help now, and the Commissioner seems to be on point for insurance with their Top Ten Tips for Wildfire Claimants, however the State may wish to advocate that insurance companies strive to improve policyholder experiences with more actionable tasks during this crisis for claims management. In Colorado, we may have learned a thing or two since the Marshall Fire, where insurers may be required to share information if they use risk models for property insurance policies under a bill proposed in February, 2025 (HB25-1182).
To learn more about what to do next on the road to recovery, contact us for more information.
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