As we strategy the 24-month milestone from the catastrophic Marshall Fires on December 30, 2021, many property house owners face the approaching expiration of their Additional Living Expenses (ALE) protection.
Background: Colorado’s Stance on ALE Coverage
As beforehand mentioned in Colorado Division of Insurance Reissues Bulletin on Colorado Homeowners’ Right to Obtain Additional or Enhanced Coverages, on January 1, 2019, the Colorado Division of Insurance reissued Bulletin No. B-5.35. This Bulletin clarified key provisions of Colorado Statutes §§ 10-4-110.8(6)(a) and 10-4-110.8(6)(b), which require insurance coverage carriers to supply owners the choice for sure extra coverages. Notably, this included non-compulsory ALE protection for a complete of twenty-four (24) months. Such foresight appears prophetic within the wake of the Marshall Fires, the place many affected property house owners are nonetheless going through difficulties in rebuilding their properties.
Colorado Division’s 2022 Plea for Extended ALE Coverage
On December 11, 2022, the Colorado Division of Insurance issued an open letter to insurers, urging them to voluntarily prolong ALE protection from the standard 12 months to 24 months for survivors of the Marshall Fires. Many survivors are nowhere close to rebuilding their properties, and with ALE advantages working out on the finish of December, they’re caught in a precarious state of affairs.
Some insurance coverage corporations positively responded to the Division’s plea. Of the 57 insurance coverage carriers that responded, ten had policyholders with solely 12 months of ALE protection, and all ten agreed to increase the advantages for as much as 24 months. “For the homeowners that only had 12 months of coverage, I know that these extensions will be a small bit of relief in what continues to be a trying time,” stated Colorado Insurance Commissioner Michael Conway.
The Current Implications
Even as we close to the 24-month milestone from the preliminary disaster, it’s evident that the prolonged 24-month ALE interval will probably be inadequate for a lot of owners nonetheless grappling with the in depth rebuilding course of. Both insurers and policyholders ought to take this as an impetus to reevaluate the adequacy of their current provisions, particularly in an period marked by the more and more unpredictable nature of pure disasters.
This brings us to an vital query: Given the insufficiency of the 24-month ALE profit interval for a lot of owners, will Colorado Insurance Commissioner Michael Conway make a renewed attraction to insurers, urging them to contemplate extending ALE protection as much as 36 months the place warranted? Such an motion might provide troubled owners the additional time they desperately must rebuild their lives.
If your insurance coverage firm has not prolonged your ALE protection or is providing you with bother with requests for an extension, please don’t hesitate to contact our workplace to debate your choices.