Colorado Requires More From Your Insurer Than You Probably Realise
Most of this site is about property. This section is about money you may already be owed, and it comes first because on a Denver fire file it is frequently worth more than the difference between any two offers.
Colorado rewrote its homeowners insurance requirements after the Marshall Fire destroyed more than a thousand homes in Boulder County at the end of 2021. The rules now sit in section 10-4-110.8 of the Colorado Revised Statutes and they set floors rather than suggestions.
Living expenses. Every replacement cost policy must include at least 12 months of additional living expense coverage, and insurers must offer the option to purchase 24 months. Check your declarations page, because many people bought the longer term and forgot.
Contents. On a total loss of the contents of an owner-occupied residence that was furnished at the time, the insurer must offer a minimum of 30 percent of the contents limit without requiring you to submit a written inventory.
Do I Really Not Have to List Everything I Lost?
Two further requirements matter for anyone deciding whether to rebuild. Insurers must offer extended replacement cost coverage of at least 50 percent of the dwelling limit, raised from 20 percent by the 2023 reforms, and law and ordinance coverage of at least 20 percent, raised from 10 percent. Law and ordinance coverage is what pays for the code upgrades a rebuild triggers, and on an older Denver house that is not a small number.
What Changes If the Fire Was a Declared Wildfire Disaster?
The full position, including the timing rules, is on our page covering coverage minimums and demolition review.
And Somebody Else Decides Whether the Lot Can Be Cleared
The second Denver fact is procedural, and the mechanism surprises owners because the decision is not really the city's.
Landmark Preservation reviews every application for a demolition permit or a Certificate of Demolition Eligibility, for all primary structures in the city. Staff have 10 business days to decide whether the building has potential to be a Denver landmark. To qualify it must be more than 30 years old or exceptionally important, be structurally intact, meet at least three of ten criteria in Chapter 30 of the Municipal Code, and retain integrity.
Most buildings are cleared quickly. Where staff find potential, they post a public notice on the property for 21 calendar days and publish a report explaining why.
What Happens During the 21 Day Posting?
That is the part worth understanding. In most cities a preservation body decides. In Denver, staff flag the possibility and it falls to a neighbour, a preservation group or anyone else to take it up. Frequently nobody does. But the risk is real and it sits outside your control, which is exactly why it affects value.
The Certificate Is Worth Money
Here is the part almost no seller knows.
A Certificate of Demolition Eligibility is not a demolition permit. It is a determination, obtained for a modest application fee, that Landmark Preservation will not review a demolition application on that property for five years. Owners use it when they are considering what to do. Buyers use it as a due diligence tool before committing to a purchase.
Which means a seller who obtains one is handing a buyer something they would otherwise have to obtain themselves, at a risk they would otherwise discount for. On any Denver house over 30 years old where clearing the site is a plausible route, that certificate is one of the cheapest things a seller can do to firm up a number.
What a Fire-Damaged Denver House Is Actually Worth
The Terms That Move the Number Here
What your policy actually provides. Extended replacement cost and law and ordinance coverage decide whether rebuilding is fundable, and both have statutory floors most owners have never checked.
The building's age. More than 30 years puts demolition review genuinely in play. Newer construction clears more easily.
Whether a certificate exists. A five year clearance is transferable value, and a buyer without one is pricing an uncertainty.
What the lot supports. Denver zoning has changed across large parts of the city, and on some parcels the land is worth more than a restored house.
Altitude and season. An unheated damaged house through a Denver winter suffers freeze damage that compounds what the fire did.
Anyone quoting without asking what your policy provides has priced the property without knowing whether you need to sell at all.
Why We Raise the Insurance Point First
Because it changes whether selling is the right answer, and a buyer who waits until after you have accepted a figure to mention it has not done you a service.
An owner with 24 months of living expenses, 50 percent extended replacement cost and 20 percent law and ordinance coverage is in a position to rebuild. An owner who has none of those is not, and a sale is genuinely the better route. Those are different situations and they deserve different advice, which is why the third step on our form asks what your insurer has actually paid rather than what burned.
How the Timeline Runs
An open claim does not prevent a sale — proceeds and property are separable and who keeps the claim is negotiable. What lengthens a Denver timeline is the combination this city produces: a policy nobody has read properly, a demolition question nobody has asked, and title.
Colorado closes through title companies. If you are weighing several offers, how to tell local cash buyers apart covers the checks that separate them.
Questions Owners Ask
My Insurer Says My Living Expenses Are Running Out.
Check the declarations page against the statutory minimum of 12 months, and check whether you bought the 24 month option. In a declared wildfire disaster the floor is 24 months with two possible six month extensions.
They Want a Full Inventory Before Paying Contents.
On a total loss of a furnished owner-occupied residence, the statute requires an offer of at least 30 percent of the contents limit without a written inventory. Ask about that minimum specifically.
My House Is 80 Years Old. Can It Be Demolished?
Usually, but it goes through Landmark Preservation review first and staff may post it for 21 days if they find landmark potential. Most postings pass without an application being filed.
Do I Have to Clear the Site First?
Not for us. Demolition and disposal are costs we price in, and on an older house the review question is one we would rather resolve properly than rush.
Sources
- C.R.S. §10-4-110.8 — homeowner's insurance prohibited and required practices
- Colorado HB 22-1111 and HB 23-1174 — wildfire total loss and underinsurance reforms
- Colorado Division of Insurance — consumer advisories on wildfire coverage
- Denver Revised Municipal Code Chapter 30 — landmark designation criteria
- City and County of Denver — demolition review and Certificate of Demolition Eligibility process