The Colardo Division of Insurance published a news release informing consumers of the provisions of HB25-1182, Risk Model Use in Property Insurance.
The bill requires that if an insurer uses wildfire risk scores in their rating, they must take into account qualified mitigation actions performed by homeowners. The mitigation efforts must be verified and certified. Policyholders should contact their insurers to find out what standards are recognized.
Insurers are required to provide a written disclosure to applicants and renewing policyholders that includes the property's wildfire risk score and an explanation of how the score was calculated. The disclosure should include the features of the property that influenced the score and the impact of mitigation techniques on the score. An insured has the right to appeal a risk score.
The bill also requires that insurers adhere to strict timelines. For new applicants, insurers must provide their wildfire risk score and explanation within 15 days of receiving their application. For existing policyholders, it must be provided with a renewal or nonrenewal notice. Appealed risk scores must be acknowledged within 10 days and reviewed within 30 days.
The bill takes effect in October and applies to admitted insurers and the Colorado FAIR Plan; it does not apply to non-admitted or surplus lines insurers.
The news release can be found here.
Ray Sugrim
Ray Sugrim is an Insurance Editor with FC&S Expert Coverage Interpretation, a division of National Underwriter Company and Arc Network. Ray is responsible for helping develop and edit content for subscribers. Ray is a St John’s University graduate with a degree in Risk Management & Insurance and is a CPCU candidate.