Granby attorney shares insurance advice from experiences with East Troublesome Fire
The East Troublesome Fire was the most destructive fire in Grand County history, but it will not be the last the community sees.
After the fire destroyed 366 homes, 132 were found to be primary dwellings and roughly a quarter of homes were uninsured. Many covered homeowners have also battled insurance policies not reaching as far as they expected.
Granby attorney Natascha O’Flaherty has helped many of those homeowners navigate the post-fire insurance process. With the fire season in full swing in Colorado, O’Flaherty is urging residents to review their policies to avoid the trouble many victims of the fire are currently enduring.
“Having spent eight months reviewing numerous different policies and the applicable laws and working with the various carriers to get claims paid out, it is clear to that some policies serve the insured better than others,” O’Flaherty said.
The first thing to look at, according to O’Flaherty, is policy coverage. Based on the size and construction details of the home, owners should make sure their policy provides enough funding to rebuild based on current local building costs.
Other structure coverage is just as important — nearly 200 outbuildings burned in the East Troublesome Fire. Structures like garages, barns, sheds, accessory buildings and fences will also need to be replaced in case of fire, so ensure that the coverage is adequate.
O’Flaherty said another important question to ask is whether policies cover replacement for both the structure and its contents.
Additionally, policyholders should look at extended replacement coverage, which is important in a community like Grand where home prices are rapidly increasing. Some provisions can offer anywhere from 20-100% more in addition to policy coverage limits.
Ordinance and law coverage is another addition to consider. It provides insurance for any increased costs associated with the enforcement of building ordinances and laws.
As families face a long road to rebuilding, loss of use coverage — known as additional living expenses — is another piece of insurance that O’Flaherty said is important to consider. This coverage pays for increased living expenses during the time it takes to repair or replace a home.
ALE pays for rent and other incidentals incurred during displacement, but it can also be used to purchase an interim home or condo, campers or other temporary housing solutions. If an owner opts to relocate and purchase a home, ALE would still apply.
Policies with additional living expense coverage must offer at least 12 months of coverage, but O’Flaherty recommends going for a policy that offers 24 months.
She said a large-scale fire like the East Troublesome can cause a shortage of labor and materials delays when the home can be rebuilt. In mountain communities, where the building season is short, the 12-month minimum may not be adequate, O’Flaherty explained.
She recommends a catastrophic loss rider if it’s offered, as this provides funds beyond policy limits in the event of a total loss. A few carriers offer this, which can provide significant additional coverage and simplify the claims payout.
Another useful provision O’Flaherty has seen for Grand County homes is wildfire endorsement coverage, where a carrier may provide at their expense wildfire suppression measures to help protect a home.
Policyholders can contact their insurance agent to review their coverage and go over these options.
After months developing an expertise handling the claims process and the state laws governing insurance claims, O’Flaherty offered a couple extra tips that could help navigate future claims.
“If you have blueprints for your home, store them on the cloud or other secure place,” she said, noting that some high-end fireproof gun vaults had only ashes left inside after the East Troublesome Fire.
She suggested homeowners take extensive photos of the interior, exterior and landscaping of their property. This includes opening each drawer and cabinet and taking pictures of the contents, O’Flaherty said. The photos should also be stored on the cloud or other safe place.
Should someone have to file a claim, O’Flaherty recommends notifying their carrier of the claim as soon as possible. During the initial evacuation, keep receipts of all expenses and document all communications with the agent and carrier in writing. Also, claimers should request a certified copy of their policy.
“Most importantly, be informed,” she said. “Know your rights as a policyholder and the rules that your carrier must follow.”
O’Flaherty emphasized that homeowners living in wildfire country should be considering these issues now. While no one wants another East Troublesome, O’Flaherty feels it’s better to be prepared.
Know Your Rights
Granby attorney Natascha O’Flaherty noted 2013 state legislation that provides important consumer protections, which include the following:
• Your insurance carrier must provide copy of your policy, including the declaration page and any endorsements, within 3 business days.
• A certified copy of your policy must be provided within 30 days of the request.
• In the event of a total loss of an owner-occupied primary residence, 30% of the personal property coverage must be paid in a timely manner without itemization. The policy owner can submit a personal property inventory to claim the remaining 70% of coverage.
• A reasonable estimate of the loss of the covered property must be paid within 60 days of the loss.
• Insures MUST consider, subject to the insurer’s underwriting requirements, an estimate from a licensed contractor or licensed architect submitted by the policyholder as the basis for establishing the replacement cost of a dwelling.
• Policy owners have one year after the loss to submit their personal property inventory.
• Penalty interest may apply on late payments to policyholders.