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Homeowner's Insurance Underinsurance

Concerning homeowner's insurance, and, in connection therewith, requiring certain reports related to the cost of reconstructing a home, increasing the notice requirement before an insurer can cancel or refuse to renew a homeowner's insurance policy, creating guaranteed replacement cost coverage in homeowner's insurance, and making an appropriation.
2023 Regular Session
Bill Summary

The act requires the commissioner of insurance (commissioner) to prepare an annual report on the cost of reconstructing homes in Colorado.

Current law prohibits an insurer from canceling or refusing to renew a policy of homeowner's insurance unless the insurer mails notice to the insured at least 30 days in advance of the effective date of the cancellation of or refusal to renew the policy. The act increases the notice requirement to 60 days in advance of the action.

The act specifies the factors an insurer must consider when determining the reconstruction costs of a dwelling and requires insurers to disclose certain information regarding the replacement costs before issuing or renewing a homeowner's insurance policy.

Current law requires an insurer to offer an applicant extended replacement cost and law and ordinance coverage before issuing or renewing certain replacement cost homeowner's insurance policies. The act requires the coverage to be:

  • Equal to 20% of the limit of insurance for the dwelling for law and ordinance coverage (changed from 10%); and
  • At least 50% of the limit of the insurance for the dwelling for extended replacement cost coverage (changed from 20%).

To implement the act:

  • $109, 955 is appropriated to the department of regulatory agencies for use by the division of insurance; and
  • $38,066 is appropriated to the department of law.

APPROVED by Governor May 12, 2023



NOTE: This act was passed without a safety clause and takes effect 90 days after sine die; except that, section 10-4-110.8 (8), Colorado Revised Statutes, as amended in section 3 of the act, takes effect January 1, 2025.
(Note: This summary applies to this bill as enacted.)


Became Law


Bill Text

The effective date for bills enacted without a safety clause is August 7, 2024, if the General Assembly adjourns sine die on May 8, 2024, unless otherwise specified. Details