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--- version:Introduced+++ version:(document, no version)@@ -1,206 +1,9 @@-Second Regular Session-Seventy-fifth General Assembly-STATE OF COLORADO-INTRODUCED+House Committee of Reference Report: Not Amended-LLS NO. 26-0777.01 Brita Darling x2241 HOUSE BILL 26-1247-House Committees Senate Committees-Business Affairs & Labor-A BILL FOR AN ACT-CONCERNING PROCEDURES REQUIR ED FOR THE RESOLUTION OF101-DISPUTED HOMEOWNER'S INSURANCE CLAIMS.102-Bill Summary-(Note: This summary applies to this bill as introduced and does-not reflect any amendments that may be subsequently adopted. If this bill-passes third reading in the house of introduction, a bill summary that-applies to the reengrossed version of this bill will be available at-http://leg.colorado.gov-.)-The bill requires each policy or contract of homeowner's insurance-(policy) issued or renewed in the state on or after January 1, 2027, to-include a mandatory and binding appraisal process, if requested by either-the insured or the insurer, for determination of disputed claims for-damage to property, including a determination of the amount of loss,-causation, and necessary scope of repair or replacement of the property.-HOUSE SPONSORSHIP-Keltie,-SENATE SPONSORSHIP-(None),-Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.-Capital letters or bold & italic numbers indicate new material to be added to existing law.-Dashes through the words or numbers indicate deletions from existing law.-The appraisal process does not determine coverage under the terms of the-policy.-The bill specifies the appraisal process requirements, including-who can serve as a fair and competent appraiser and umpire, the selection-of an appraiser by each party, and the joint selection of an umpire by the-parties' appraisers, prior to commencing negotiations, in the event the-insured and insurer cannot resolve the dispute. The affirmative vote of the-appraisers or of an appraiser and the umpire determines the loss amount.-The insured and insurer each pay their own expenses for their appraiser-and share the expenses of the umpire. The bill includes a timeline for-completing the appraisal process, including completion within 4 months-after the umpire is selected. The bill tolls the timelines for certain contract-provisions while the appraisal process is pending.-The bill also specifies information that must be provided to an-insured with respect to an insurer's initial review of a claim. An insurer-shall provide written evidence supporting an initial coverage-determination. If the amount of loss is disputed, the insured may submit-third-party damage assessments and the insurer shall reprocess the claim,-taking into account the third-party damage assessments.-The bill declares that it is an unfair method of competition and-unfair or deceptive act or practice in the business of insurance to willfully-or repeatedly violate the provisions of the bill concerning the appraisal-clause process for policies.-Be it enacted by the General Assembly of the State of Colorado:1-SECTION 1. In Colorado Revised Statutes, 10-3-1104, add2-(1)(uu) as follows:3-10-3-1104. Unfair methods of competition - unfair or deceptive4-practices - rules - definitions.5-(1) The following are defined as unfair methods of competition6-and unfair or deceptive acts or practices in the business of insurance:7-(uu) A- WILLFUL OR REPEATED VIOLATION OF SECTION 10-4-1258-CONCERNING THE APPRAISAL CLAUSE PROCESS FOR HOMEOWNER 'S9-INSURANCE POLICIES OR CONTRACTS.10-SECTION 2. In Colorado Revised Statutes, add 10-4-125 as11-follows:12-HB26-1247-2--10-4-125. Homeowner's insurance - dispute of claims - damage1-validation through third-party assessment - appraisal process in2-policies and contracts - definitions.3-(1) AS USED IN THIS SECTION, UNLESS THE CONTEXT OTHERWISE4-REQUIRES:5-(a) "APPRAISER" MEANS AN INDIVIDUAL WHO IS:6-(I) LICENSED IN THE STATE AS:7-(A) A CONTRACTOR IN THE BUILDING AND CONSTRUCTION TRADES;8-(B) AN INSPECTOR;9-(C) A PUBLIC ADJUSTER; OR10-(D) AN ATTORNEY;11-(II) AN IN-HOUSE INSURANCE COMPANY ADJUSTER; OR12-(III) AN INDEPENDENT INSURANCE ADJUSTER.13-(b) "COVERED PROPERTY" MEANS A NAMED PROPERTY UNDER A14-POLICY OR CONTRACT OF HOMEOWNER'S INSURANCE.15-(c) "FAIR AND COMPETENT" MEANS AN APPRAISER OR UMPIRE:16-(I) IS NOT A PARTY TO THE INSURANCE POLICY OR CONTRACT;17-(II) DOES NOT HAVE A FINANCIAL INTEREST THAT IS CONDITIONED18-UPON THE OUTCOME OF THE APPRAISAL;19-(III) IS NOT A CURRENT EMPLOYEE OF THE INSURED OR INSURER ;20-AND21-(IV) IS NOT A FAMILY MEMBER OR AN INDIVIDUAL WITH WHOM THE22-INSURED HAS A PERSONAL RELATIONSHIP THAT COULD REASONABLY23-SUGGEST BIAS.24-(d) "HOMEOWNER'S INSURANCE" HAS THE MEANING SET FORTH IN25-SECTION 10-4-101.5 AND INCLUDES A POLICY OR CONTRACT THAT COVERS26-A SINGLE -FAMILY HOME THAT IS USED AS A PRIMARY RESIDENCE , A27-HB26-1247-3--SECONDARY RESIDENCE, OR A RENTAL PROPERTY.1-(e) "INSURED" MEANS A HOMEOWNER'S INSURANCE POLICYHOLDER2-OR THEIR DESIGNATED REPRESENTATIVE.3-(f) "INSURER" MEANS AN INSURER OF A POLICY OR CONTRACT OF4-HOMEOWNER'S INSURANCE ON THE COVERED PROPERTY AND INCLUDES5-THE FAIR PLAN ASSOCIATION CREATED IN SECTION 10-4-1804.6-(g) "T HIRD-PARTY DAMAGE ASSESSMENT " MEANS A WRITTEN7-DAMAGE ASSESSMENT OR REPAIR ESTIMATE FROM A QUALIFIED ,8-INDEPENDENT COMPANY OF AN INSURED'S CHOICE.9-(h) "UMPIRE" MEANS AN APPRAISER OR RETIRED JUDGE SELECTED10-JOINTLY BY AN INSURED'S APPRAISER AND AN INSURER'S APPRAISER, OR BY11-A COURT OF COMPETENT JURISDICTION , AFTER AN APPRAISAL CLAUSE IS12-INVOKED.13-(2) (a) W ITHIN FOURTEEN DAYS AFTER AN INSURER HAS14-INVESTIGATED A CLAIM AND MADE AN INITIAL COVERAGE15-DETERMINATION, THE INSURER SHALL PROVIDE TO THE INSURED , IN16-WRITING, EVIDENCE SUPPORTING THE INITIAL COVERAGE DETERMINATION,17-INCLUDING POLICY OR CONTRACT PROVISIONS RELIED UPON BY THE18-INSURER, AND ADJUSTER OR CONSULTANT REPORTS PROCURED DURING19-THE INVESTIGATION.20-(b) I F AN INSURED DISPUTES THE INSURER 'S INITIAL COVERAGE21-DETERMINATION, THE INSURED MAY SUBMIT THIRD -PARTY DAMAGE22-ASSESSMENTS. UPON RECEIPT OF AN INSURED 'S THIRD -PARTY DAMAGE23-ASSESSMENT, THE INSURER SHALL CONSIDER THE INFORMATION PROVIDED24-IN THE DAMAGE ASSESSMENT IN GOOD FAITH AND CONDUCT AN ON -SITE25-REINSPECTION OF THE PROPERTY WITHIN FORTY-FIVE DAYS AFTER RECEIPT26-OF THE THIRD-PARTY DAMAGE ASSESSMENT.27-HB26-1247-4--(c) WITHIN TWENTY-EIGHT DAYS AFTER A REINSPECTION OF THE1-PROPERTY REQUIRED PURSUANT TO SUBSECTION (2)(b) OF THIS SECTION2-IS COMPLETED , THE INSURER SHALL EITHER APPROVE THE CLAIM OR3-PROVIDE VALID AND SPECIFIC REASONS FOR DENIAL OF THE CLAIM IN4-REFERENCE TO THE POLICY OR CONTRACT.5-(3) IF THERE IS A DISPUTE OVER THE AMOUNT OF LOSS, EITHER THE6-INSURED OR THE INSURER MAY MAKE A WRITTEN REQUEST TO INVOKE THE7-APPRAISAL CLAUSE OF THE POLICY OR CONTRACT , AS DESCRIBED IN8-SUBSECTION (4) OF THIS SECTION.9-(4) (a) EACH POLICY OR CONTRACT OF HOMEOWNER'S INSURANCE10-ISSUED OR RENEWED IN THE STATE ON OR AFTER JANUARY 1, 2027, MUST11-INCLUDE A CLAUSE AUTHORIZING AN INSURER OR INSURED TO INVOKE A12-MANDATORY AND BINDING APPRAISAL PROCESS IN COMPLIANCE WITH THIS13-SECTION TO SETTLE A DISPUTE OVER THE AMOUNT OF LOSS , CAUSATION,14-OR NECESSARY SCOPE OF REPAIR OR REPLACEMENT OF PROPERTY . THE15-APPRAISAL PROCESS DOES NOT DETERMINE COVERAGE UNDER THE TERMS16-OF THE POLICY OR CONTRACT.17-(b) T HE APPRAISAL CLAUSE MUST INCLUDE THE FOLLOWING18-PROVISIONS:19-(I) T HE RIGHT OF THE INSURED AND INSURER TO CHOOSE THEIR20-OWN FAIR AND COMPETENT APPRAISER WITHIN TWENTY-ONE DAYS AFTER21-RECEIPT OF THE WRITTEN REQUEST TO INVOKE THE APPRAISAL CLAUSE;22-(II) THE JOINT SELECTION OF A FAIR AND COMPETENT UMPIRE BY23-THE INSURED'S APPRAISER AND THE INSURER 'S APPRAISER PRIOR TO THE24-PARTIES' APPRAISERS COMMENCING DISCUSSION OR NEGOTIATIONS UNDER25-THE APPRAISAL CLAUSE. IF THE INSURED'S APPRAISER AND THE INSURER'S26-APPRAISER CANNOT AGREE TO THE SELECTION OF AN UMPIRE WITHIN27-HB26-1247-5--TWENTY-ONE DAYS, EITHER PARTY MAY PETITION A COURT OF COMPETENT1-JURISDICTION IN THE JURISDICTION IN WHICH THE PROPERTY IS LOCATED2-TO SELECT AN UMPIRE FROM AMONG THOSE PRESENTED BY THE INSURED'S3-APPRAISER AND THE INSURER 'S APPRAISER OR OF THE COURT 'S OWN4-CHOOSING.5-(III) THE AMOUNT AGREED UPON IS THE AMOUNT OF LOSS. IF THE6-APPRAISERS FAIL TO AGREE, THE DIFFERENCES BETWEEN THE APPRAISALS7-MUST BE SUBMITTED TO THE UMPIRE. THE AFFIRMATIVE VOTE OF ANY TWO8-OF THE THREE PARTICIPANTS IN THE APPRAISAL PROCESS WILL SET THE9-AMOUNT OF LOSS. THE APPRAISAL PROCESS MUST BE RESOLVED BY THE10-APPRAISERS, OR AN APPRAISER AND THE UMPIRE , WITHIN ONE HUNDRED11-TWENTY DAYS AFTER THE SELECTION OF THE UMPIRE.12-(IV) THE APPRAISAL PROCESS AND AUTHORITY GRANTED TO THE13-APPRAISERS OR UMPIRE MAY BE EXPANDED OR MODIFIED ONLY BY14-WRITTEN, MUTUAL CONSENT SIGNED BY BOTH THE INSURED AND INSURER;15-AND16-(V) W ITH RESPECT TO PAYMENT FOR SERVICES AND EXPENSES17-RELATING TO THE APPRAISAL PROCESS, EACH PARTY SHALL:18-(A) PAY ITS OWN APPRAISER;19-(B) P AY THE EXPENSES FOR ATTORNEYS OR CONSULTANTS20-RETAINED BY THE PARTY; AND21-(C) SHARE EQUALLY THE EXPENSES OF THE UMPIRE.22-(5) U NTIL THE APPRAISAL PROCESS IS CONCLUDED , THE23-FOLLOWING POLICY OR CONTRACT TIMELINES ARE TOLLED:24-(a) THE RECOVERING OF APPLICABLE REPLACEMENT COST VALUE25-BENEFITS, CODE COVERAGES, AND ADDITIONAL COVERAGES;26-(b) THE TIME LIMIT WITHIN WHICH AN INSURED MAY BRING SUIT27-HB26-1247-6--AGAINST THE INSURER; AND1-(c) THE TIME LIMIT WITHIN WHICH AN INSURED MUST MAKE THE2-REPAIRS.3-(6) (a) A HOMEOWNER 'S INSURANCE POLICY OR CONTRACT ,4-INCLUDING ANY ENDORSEMENT , MUST NOT INCLUDE A PROVISION THAT5-PROHIBITS AN INSURED FROM CONTRACTING WITH A PUBLIC ADJUSTER OR6-ATTORNEY FOR SERVICES.7-(b) A N INSURED IS NOT REQUIRED TO ENTER INTO A CONTRACT8-DESCRIBED IN SUBSECTION (6)(a) OF THIS SECTION.9-(7) A VIOLATION OF THIS SECTION CONSTITUTES AN UNFAIR10-METHOD OF COMPETITION OR AN UNFAIR OR DECEPTIVE ACT OR PRACTICE11-IN THE BUSINESS OF INSURANCE PURSUANT TO SECTION 10-3-1104 (1)(uu).12-SECTION 3. Act subject to petition - effective date -13-applicability. (1) This act takes effect January 1, 2027; except that, if a14-referendum petition is filed pursuant to section 1 (3) of article V of the15-state constitution against this act or an item, section, or part of this act16-within the ninety-day period after final adjournment of the general17-assembly, then the act, item, section, or part will not take effect unless18-approved by the people at the general election to be held in November19-2026 and, in such case, will take effect January 1, 2027, or on the date of20-the official declaration of the vote thereon by the governor, whichever is21-later.22-(2) This act applies to policies or contracts of homeowner's23-insurance issued or renewed on or after the applicable effective date of24-this act.25-HB26-1247-7-+Committee on Business Affairs & Labor++March 25, 2026++After consideration on the merits, the Committee recommends the following:++HB26-1247 be postponed indefinitely.
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