The insurance department is asking insurers to expand ALE coverage

“The Division once again asks that you volunteer to help the Marshall survivors.”

The Colorado Division of Insurance (DOI), part of the Department of Regulatory Agencies, issued an open letter to the insurance companies of homeowners with policyholders in the Marshall Fire area. The letter urges insurers to expand additional living expenses (ALE) coverage in homeowners’ policies if the policy had at least 12 months of coverage. These are the expenses people have when they are unable to live in their house due to a catastrophic event like a fire, but still need housing and other necessities of life.

Some Marshall Fire survivors only have 12 months of ALE coverage stated on their homeowners’ policies. These people are far from having a rebuilt home to move back into. The letter asks insurance companies to help these people who have lost so much by stepping up ALE protection and extending it up to 24 months.

“Earlier this year we asked companies to do more, get involved and make life easier for Marshall Fire survivors. And to their credit, most companies met our requirements,” said Colorado Insurance Commissioner Michael Conway. “With the rebuilding process just beginning for so many, expanding ALE coverage is critical to letting people know they can continue to have a roof over their heads.”

The open letter below is posted on the department’s website for review by the public and insurance companies and is followed by a survey of insurance companies asking them to consider extending policies limited to 12 months of ALE coverage to 24 months Months to agree ALE coverage. Responses are due to the DOI by December 30th.

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As a reminder, Marshall Fire survivors with questions or concerns about their insurance may contact the DOI’s Consumer Services team at 303-894-7490 / [email protected].

To: Insurance companies that sell homeowners insurance in Colorado

In the months immediately following the Marshall Fire, the Colorado Division of Insurance (DOI) reached out to all of you, the companies that sell homeowners insurance in Colorado — particularly the companies whose policyholders were affected by the Marshall Fire. We asked you to help survivors with key questions to make life a little easier after the horrific aftermath of one of Colorado’s worst disasters. We asked you to get involved to help the Marshall Fire survivors and overwhelmingly you did.

The Division asks you again to help the Marshall survivors.

The Marshall Fire’s one-year anniversary is fast approaching. And that anniversary date will also bring the end of the Additional Living Expense (ALE) benefits that some people have given their policies. As you all know, Colorado law requires all of you to offer at least 24 months of ALE benefits to your policyholders once policies have been issued and renewed. Even with this legal requirement, some pre-HB 22-1111 Marshall survivors only have 12 months of ALE insurance. And because of the nature of this disaster – its size and magnitude – as well as the economic circumstances across the country over the past year, 12 months of ALE insurance will not be enough for people. For some, construction didn’t start until this summer as people had to wait while debris was cleared from all affected homes. There are many others with even more recent housing starts. All these factors have made it impossible for people to rebuild their homes in just one year.

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For policyholders in the Marshall Fire Area with a total home loss and only 12 months of ALE, the Division is asking all insurers to provide an extension of ALE benefits for reconstruction up to 24 months.

We think it is important to emphasize two things. First, many of you are selling policies with at least 24 months of ALE coverage before the HB 22-1111 requirements came into effect. We are very grateful. Second, our request for this extension is fully consistent with the spirit of HB 22-1111 and the support the legislation has received in the Legislature.

As in the past, we will ask you about this request. It was extremely helpful to the Marshall Fire survivors and everyone in Boulder County, Louisville and Superior when the department updated them on how all insurance companies are responding to our inquiries. A survey on your ability to offer ALE extensions will be sent to companies this week and we need your responses no later than December 30, 2022.

As we all know, most Marshall Fire survivors are still trying to get their lives back on track. By extending the ALE to up to 24 months, they can rest easier while their homes and lives are rebuilt. We hope you will join us to help the community recover and rebuild.

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