Those impacted by Marshall Fire work through puzzling homeowners insurance policies, payouts
By Alan Gionet
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BOULDER COUNTY, Colorado (KCNC) — Even in the cold darkness, the destruction at the home owned by Joe Martinez and his wife Lori is clear in the aftermath of the Marshall Fire. Some bricks of the façade remain, but behind it is a hole where the rest of house was.
Choked with emotion, Joe is somehow still thankful, “I just lost my house, I lost everything I own, but I feel like the luckiest guy in the world because through this I saw the outpouring of friends and family. That means a lot to me.”
Even with his insurance company, things seem to be going well.
“I’m feeling pretty good about what the insurance company is saying right now.”
They have offered him money, but he’s unsure.
“I have to do some number crunching before I can say if that’s enough or not. The number that we got for the replacement of the house, it looks good now, but will it look good in two, two and a half, three years?”
That’s how long he figures it may be before he’s able to rebuild. The cost of materials and labor and prices, in general, are rising.
“Well, the first thing to do is take a deep breath. There is no hurry. This is a marathon. It’s not a sprint,” said Scott deLuise, CEO of Adjusters International and chairman of the Rocky Mountain Association of Insurance Adjusters.
His role as advisor to people on insurance puts him in a position to see trends and be concerned about the levels of coverage for many of those hit by the Marshall Fire. Typically, less than half of homeowners are underinsured. With this fire, it appears that numbers is far higher.
“Somewhere in the neighborhood of 70% to 75%.”
He tells homeowners to hold off. Some of the costs that they are paid are not known until after payment.
“Do not accept the first offer that the company makes to you even if it’s policy limits. Because that extended replacement cost endorsement is not going to be paid unless the insurance company agrees that that’s what they owe you as well.”
Those reimbursements come after.
“When they rebuild their home they’ll get that extra, 20, 25 some policies say 50%. Some policies have a guaranteed replacement cost endorsement which means that whatever it costs to rebuild the house the insurance company will eventually repay, if you can prove that your loss is more than your base policy limit.”
Boulder County this week formally filed for FEMA support to finance the cost of clearing land and removing foundations. The federal government is being asked to approve the costs over what insurance will pay for removal. If not, there may be an effort to get Coloradans to pony up to help, possibly through a local tax initiative in the county.
DeLuise says holding can put people in a better position when they understand the total cost.
“Don’t spend the money that you don’t know you’re going to have for sure. Don’t start construction until the entire amount of loss has been determined. Even past policy limits.”
And for some, he says, it might make sense to consider buying another home.
“If they buy a house in another location they still own the land underneath the house that burned down and they can sell that and that will help as well.”
Martinez says he does not believe his insurance company is trying to take advantage of him. And wants to get started. He has about a half dozen acres of property on the west side of Superior and would like to get going. But still wonders.
“If I could get started right away, yeah, I would start looking at building plans and builders… I want things to be done right. I want mitigation to be done right. I want the cleanup to be done right. So you know, we’ll see.”
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