Just days after the most destructive wildfire in Colorado’s history, Colorado Division Insurance Commissioner Michael Conway called a virtual town hall for the hundreds of victims who lost their homes in the county. from Boulder.
The Marshall Fire burned more than 6,000 acres between Louisville and Superior on December 30, destroying nearly 1,100 homes and businesses in Boulder County and damaging many more. One person was killed.
Conway wanted to help guide residents through the long and complicated insurance claims process and reassure them that the state would do everything it could to negotiate with insurance companies.
He did not give them false hopes about the grueling process that awaited them.
“You are all facing an incredible tragedy,” Conway said during the videoconference meeting attended by more than 800 people. “My heart is truly breaking for everything you’ve all been going through. You’ve lost homes, but with your homes, you’ve lost everything. … It’s going to be incredibly difficult for you to rebuild.
On the wall of Conway’s office, viewers could see an image of a lion that had obviously been drawn by a child.
In the three and a half months since the fire, Conway has attended at least 12 public hearings, city council meetings or roundtables to help provide complicated insurance information and explain what these victims are going through. Many face an underinsurance problem that will pay them back far less than their homes were worth – with the majority being worth more than $1 million.
Conway, who has served as the commissioner since 2018, took a few questions from the Denver Gazette on Monday, including about a bill that would help homeowners whose homes were destroyed by wildfire recover proceeds from the fire faster. insurance and with less burdensome proof of inventory requirements.
The following answers have been edited for more length.
Q: Why is it important for you to personally attend all the meetings you have had since the Marshall fire?
A: A few different reasons, but at the top of the list, it’s just important for people to know that their government officials are out there and they care. Let them work for them to try to find solutions to the problems they encounter. That’s the kind of mindset we took with the specific requests we made to insurance companies to try to help people recover from the fire. That was really our main driving force: finding ways to ask insurance companies to work with their policyholders and make insurance collection a little bit easier.
Q: I would like to ask you about the lion image on your wall and its significance. You mentioned it during that very first encounter with fire victims.
A: We were preparing for this town hall, just days after the fire. … I had really put this lion up as a kind of joke. More than anything, it’s a kind of conversation starter. I mean a lot of people in these Zoom meetings have elaborate backgrounds, and I just had this lion behind me. It is obviously drawn by a child. So, walking into this town hall, I thought a lot about the fact that I was going to have something behind me on this wall and it would remind people of what they had lost. I had a hard time leaving him up there. But I basically landed on the point that I thought we should leave it in place. I wanted to leave it as a constant reminder for us. To the Division of Insurance, a constant reminder to me every day that we still have work to do for the people of Louisville and Superior and the unincorporated county of Boulder – and those of the East Troublesome Fire (the second largest fire in Colorado history in 2020 destroyed the outlying community of Grand Lake, engulfing 193,182 acres in three days and destroying 370 homes and 188 outbuildings). And just as important, for future fire victims. We still have a lot of work to do.
Q: Can you update us on the Marshall Fire underinsurance investigation? I know you have requested a lot of information from the insurance companies involved.
A: We always analyze the data we have received from insurance companies. We are working to create baseline data, at least initially, on what the average homeowner had and specifically how underinsured they are if the cost to rebuild is $200 or $300 per square foot. It’s really to start the conversation about potential solutions in the future, for long-term solutions… We’re looking closely at the underlying data to see if there’s any help we can provide to owners who were hit by the Marshall Fire, too. It will be more difficult to find (long-term) solutions. Just to be completely frank, there may be a complete lack of ability to make owners whole.
Q: After the Great California Wildfires and the Troublesome East Fire, why hasn’t the Insurance Division addressed this issue? We saw the exact same underinsurance problem back then.
A: We have had discussions about this with (legislative) representatives. House Bill 22-11 (Insurance Coverage For Loss Declared Fire Disaster. “Regarding insurance coverage for insured losses incurred as a result of a declared fire…The bill establishes new coverage requirements for policies of home insurance issued or renewed in Colorado, which requirements apply in the event of loss of a residence due to a declared fire. The bill also establishes new requirements for insurers issuing or renewing home insurance policies. homeowners insurance, which requirements relate to the insurer’s handling of police claims after such a loss occurs.) which was really designed to deal with what we hear most about the Marshall fire related to inventory issues and then rebuilding time. … These complement the underinsurance issue that has occurred in the American West, and the southeastern states. We are trying to find r the right solution and to give as much information as possible to the owners so that they can make informed decisions. But the states ha We haven’t found some kind of magic bullet there… We’re also looking at potential availability issues (some insurance companies don’t provide coverage in some wildfire and hurricane prone states, eg) Colorado so far hasn’t had this but I’m afraid it will happen and will obviously exacerbate underinsurance issues.
Q: What is the status of HB22-11?
A: I was just testifying at the Capitol on this. He walked out of the Senate committee with a unanimous vote in his favour. He progresses in the process. The insurance companies are not against it, and obviously the advocates and the owners have been very strongly behind it, and we support it as well.
Q: Will this increase rates?
A: Lawmakers have raised concerns about this… There are two reasons why I don’t foresee this happening. It’s so narrow. It only applies to wildfires, and to make it even narrower, it only applies to wildfires that have been declared a disaster by the governor. It also only applies to total losses. … It’s an incredibly small subset of landlords, I don’t see it fundamentally raising rates.
Q: Let’s move on to other insurance issues. Why are there no short term health plans in Colorado?
A: This is a question you need to ask the insurance companies. We would be happy to have short term plans that comply with the law. The short-term carriers that are there just don’t want to comply with Colorado’s legal requirements, so they haven’t offered coverage here.
Q: Last week, the division fined Bright Health at least $500,000 for settling more than 100 complaints that it was not paying for the care its customers received, among other issues. We’ve heard from agents whose clients are in collections because of this issue, and Bright Health also made significant layoffs last year. Was the finesse sufficient? Has a cease and desist order been considered?
A: It was essentially a review analysis of a cease and desist order. This would have required Bright Health to cease acting as an insurance company in the state of Colorado altogether. This would have been extremely detrimental to people who currently have Bright Health insurance coverage. I think of all those people who have paid their deductibles and have their doctors lined up through Bright Health. It would be an incredibly detrimental impact for these people. …I was really holding them accountable for the mistakes they made, but I was also putting an incentive – a pretty big incentive – in place for them to put everything right and to make sure they have solutions to the coming. (In order for Bright Health to avoid paying the other half of the $1 million fine, Bright has agreed to process and pay all old Peak supplier claims by April 7 and pay 95% of correct claims by April 22 and to remain at a high level through the rest of the year.)