This article is from the Denver Post and can be found at http://www.denverpost.com/business/ci_21431280/colorado-homeowners-upset-high-park-wildfire-insurers
FORT COLLINS — Residents whose homes burned in the High Park wildfire packed a Larimer County meeting Wednesday night to criticize the way their claims are being handled by insurance companies.
Homeowners, some in tears and with breaking voices, complained that insurance-settlement offers are falling far short of expected levels.
People in the crowd of about 130 complained of depreciated insurance-settlement offers that fail to cover rebuilding costs, and difficulty in getting full reimbursement for home contents lost in fires.
A particular aggravation of some speakers was the need to exhaustively document lost personal possessions during an emotionally challenging time.
“Being required to list all personal contents is inhumane after a disaster of this magnitude,” said Dale Snyder, who lost his Rist Canyon home during the June fire. “It’s extremely painful and time consuming, to say the least.”
Other homeowners said depreciated payments for destroyed homes make rebuilding difficult or impossible.
“If they feel the need to depreciate my policy by that amount, then why did they accept my premium (payment) for that value?” said Trish Garner, who lost her Rist Canyon home.
In many cases, insurers offer settlement amounts based on a percentage of replacement costs. The full value of the policy is not paid until structures are rebuilt and possessions are replaced.
Insurance-industry representatives noted that companies operate within the law and follow standard practices by requiring an accounting of costs and completion of rebuilding before full reimbursement is made.
State Rep. Claire Levy, D-Boulder, garnered applause from the crowd when she said she will introduce legislation in the 2013 session to offer more protection to homeowners in their dealings with insurers.
The legislation would direct insurers to certify that replacement costs accurately reflect local construction costs as well as requiring companies to offer at least partial payments on personal contents without the need for itemization.
Some citizens are calling for Colorado to pass a law that would require insurers to pay upfront the full face value of policies in the event of a total loss, without depreciation and holdbacks.
So-called “valued policy laws” are in effect in 19 states. Most of those states mandate full reimbursement for lost structures but still require itemized lists for content replacement.
Insurers are listening to homeowner concerns but are wary about proposals that could increase premiums and encourage fraud, said Carole Walker, executive director of the Rocky Mountain Insurance Information Association, an industry trade group.
Colorado state Rep. John Kefalas, D-Fort Collins, has said that while he is not endorsing a valued-policy law, he sees the need for changes that would bring more consistency to insurance policies and claims.
“They’ve been through so much anguish from the fires, and now there seems to be a lot of hassles that people are going through,” Kefalas said. “Maybe we need to get more consistency in how these things are handled.”
Walker said the history of valued-policy laws shows that homeowners in areas with low risk of wildfires or other natural disasters end up paying higher premiums for the benefit of the minority living in high-risk areas.