Colorado Division of Insurance (DOI) Issues Bulletin B-5.44 Advising Insurers on Communication of Coverage Limits

Colorado Division of Insurance (DOI) Issues Bulletin B-5.44 Advising Insurers on Communication of Coverage Limits

 

On February 8, 2022, the DOI issued a bulletin following the significant impact of the Boulder County Fires which occurred on Dec. 30, 2021. The purpose of the bulletin was to inform insurance carriers and affected consumers of the Division of Insurance’s position concerning the communication of certain coverage limits of liability for policyholders who experienced a loss claim resulting from the fires. The DOI provided the following guidance:

  • Insurance companies must provide a complete copy of the policy within 3 business days of a policyholder’s request. If requested, the insurance company shall provide a certified copy of the policy within 30 days of the policyholder’s request.
  • Within 10 days of a policyholder’s request, insurance companies shall provide policyholders with a written explanation of the coverages and coverage limits applicable to the loss. This information should supplement the information contained in the declarations page, which informs the policyholder of the coverage limits for each coverage under the policy. This explanation must include the following information:
    • A description of each property coverage, including any special limits or additional coverages, applicable to the loss and consistent with the requirements in C.R.S. § 10-4- 110.8(7)(a),
    • Payment requirements or limitations under each applicable coverage; o Documentation requirements for each applicable coverage, and
    • Whether the additional applicable coverages are subject to or in addition to the applicable limit of coverage.
  • Carriers are instructed to provide information to their policyholders who have experienced a total loss about the Boulder County Debris Removal Program and its impact on their coverage limits.
  • Due to the extent of the destruction for policyholders who experienced a total loss, the DOI requests carriers to maximize the payout on additional coverages without requiring the policyholder to incur the actual costs before reimbursement.
  • If applicable, policyholders must be notified that any payments issued under coverages requiring policyholders to incur costs could be subject to repayment should the policyholder elect to relocate and not rebuild.

Link to Bulletin