Due to the recent Marshall Fire, many homes were destroyed or damaged resulting in many insurance claims. C.R.S. §10-4-120 is a Colorado statute that prevents unfair or discriminatory insurance trade practices. Homeowners making claims under their homeowners insurance policies have the right to choose their own repair business. An insurance company cannot directly or indirectly require that repairs to a home or property be made by a specific repair business. Is your insurance company advising you that it will not pay more than what the repair company it sent to the property estimated the necessary repairs to cost even though you have multiple competing bids showing that the repairs needed are more or cost more in the current market? Is your insurance company stating that they will not pay for alternate housing accommodations because you chose not to use their repair person who was available to do the work earlier even though you don’t want to use that company? This could be viewed as an indirect way to require you to use a specific repair business contrary to Colorado law. If your homeowners insurance company is delaying payment on a claim in order to induce you to use a particular repair business that they want you to use, this may also be a violation of the law. The statute prohibits an insurance company from representing that the use of or the failure to use a particular repair business may result in the nonpayment or the delayed payment on a homeowners insurance claim for damages.
Colorado statute Section 10-4-120 is designed to prohibit a homeowners insurance company from intimidating, coercing, threatening or inducing a homeowner to use a particular repair business to conduct the repairs at the property following damage to a property that results in a claim to the insurance company. Homeowners insurance companies cannot use disincentives to discourage a claimant homeowner or property owner from using the repair business of their own choice. The law is supposed to protect homeowners by requiring their homeowners insurance company to promptly pay for repair services chosen by the homeowner based on the prevailing competitive price as established by competitive bids not one bid from a preferred repair company of the insurance company’s choosing. If you know of someone who needs assistance with their homeowners insurance company claim following the Marshall fire or otherwise, please contact Cindy Manzano at Frascona, Joiner, Goodman and Greenstein, P.C. See Cindy Manzano’s bio here.
For additional information regarding the laws concerning homeowners and their insurance companies, see the following 3 links: