Almost a year and a half after the most destructive wildfire in Colorado history, many Four Mile Canyon fire victims are still struggling to rebuild, and some still haven’t settled with their insurance companies. Many have accused these firms of low-balling claims and trying to wriggle out of replacing what was lost. There has been growing pressure on state lawmakers to intervene. But a bill that would have tightened regulations on insurance companies died a quick death in a Republican-controlled committee Wednesday.
‘Replacement Coverage’
The 2010 Four Mile Canyon fire over Labor Day weekend destroyed every single corner of Jane Sanders’ property. Her house, garage, several outbuildings.
“We have two small children, and they just want to go back home,” Sanders says. “It’s very painful.”
Sanders, her husband and two young children have been renting in Boulder ever since.
“The pain from dealing with the fire was very traumatic, but the pain from dealing with the insurance company has greatly surpassed that,” she says.
Sanders says she figured the so-called “replacement coverage” she bought, meant just that, her family’s possessions would be replaced and her home rebuilt.
But 17 months after the fire hit, this is still up in the air, and instead of rebuilding she’s still wrangling with her insurance company.
Fire Bill Doused
Wednesday Sanders and a dozen or so of her former neighbors drove to Denver to testify at a legislative hearing in favor of a reform bill sponsored by Representative Claire Levy (D-Boulder). For more than a year, Levy has been writing legislation to tighten regulations on casualty insurance policies sold in Colorado to prevent alleged deception in cases like Jane Sanders.
Levy told the House Local Government committee that more than half of the Four Mile fire’s victims thought they were adequately covered.
“The tragedy of the situation is that you don’t know that you are not covered, you don’t know that you’re not protected until it is too late to do anything about it,” Levy said.
Before it was stripped down and eventually killed on a party-line vote, Levy’s bill would have required insurance companies to cover living expenses for natural disaster victims for two years, instead of one. But the meat of it would have mandated that companies base their pay-out estimates for natural disaster victims on the actual construction costs of where they live…case in point, it costs more to build in the rugged, fire-prone foothills of the Front Range than it does in say Loveland.
But Carole Walker, director of the Rocky Mountain Insurance Information Association, says that simply wouldn’t work.
“Not everybody has the same needs, it’s sort of a one size fits-all,” Walker says. “If you live at 10,000 feet in Boulder, you’re also going to have that same kind of policy if you live in downtown Denver or downtown Boulder where the risk isn’t as high.”
Shift in Policies
It used to be that the insurance industry wrote blanket reimbursement checks in the wake of natural disasters. But when wildfires started gaining in intensity and destruction in the West a couple of decades ago, things started to change. Companies began requiring itemized documentation of things that were lost before they cut checks.
“Otherwise someone could just say, ‘well I had ten flatscreen TVs, this was an antique when in fact it’s $10 on Craig’s List,’” Walker says. “When you’re trying to insure all people who have homeowners insurance and renter’s insurance in Colorado, it’s a matter of saying we have to have some sort of proof of loss.”
But all of this becomes especially controversial when, as in the Four Mile Canyon fire, some of those lists and videos made by proactive homeowners, melted, even in supposedly fire-proof safes. Another provision of Levy’s bill would have required a blanket, so-called guaranteed replacement of up to 80% of a natural disaster victim’s losses.
Now, the bill’s quick death yesterday isn’t necessarily a surprise. Some had suggested it got assigned to a committee where it would easily fail due to loud opposition from the influential insurance industry.
More Conflicts Loom
Still, even if it had passed, it wouldn’t have helped Four Mile Fire victims like Tave Campbell.
“In our case, there was a disinclination to write checks,” says Campbell, who lost his home in Four Mile Canyon and just finished negotiating a settlement before Christmas.
But Campbell says right now, state law gives too much leeway to the insurance company, and not enough to consumers.
“None of us feel like any Coloradan, anybody, should have to go through this,” Campbell says. “In my opinion, insurance companies in Colorado are allowed to write contracts but they don’t have to live up to them.”
People like Campbell left Wednesday’s hearing frustrated, warning that the conflicts between insurance companies and those who lose their homes will only worsen when the next, inevitably large wildfire sparks.
