Colorado Advances Wildfire Smoke Cleanup Standards to Streamline Insurance Claims

A state-commissioned study in Colorado addresses the need for standardized protocols for cleanup and sampling of homes affected by wildfire smoke and ash contamination, a gap highlighted by the 2021 Marshall fire which damaged or destroyed about 1,000 homes. This fire exposed challenges in inconsistent testing claims, inefficient cleanup processes, and disputes between insurers and policyholders regarding remediation standards. The study, mandated by Colorado House Bill 1315 and commissioned by the Colorado Division of Insurance, aims to create uniform guidelines to streamline claims, reduce conflicts, and improve regulatory oversight. Wildfires impacting the wildland-urban interface produce complex contamination from burning synthetic materials such as plastics, paints, and furniture, posing health risks that are not yet governed by enforceable indoor remediation standards. Homeowners and public adjusters have reported prolonged displacement and health issues linked to toxic smoke residues, underscoring the need for clear evaluation and cleanup criteria. While some property insurance stakeholders recognize the necessity of establishing standards for assessing smoke and ash damage, others caution that adopting such protocols might destabilize the property insurance market, potentially increasing premiums and reducing coverage availability. Industry voices express concern that costly testing mandates could drive claim severity and frequency akin to historical asbestos and mold litigation. The study’s draft recommends five key initiatives: standardizing testing and cleanup beyond soot and ash, developing educational resources for policyholders and insurers, conducting insurance cost impact analyses, and ongoing scientific monitoring of wildfire toxin data. It also explores how standardization might lower overall insurance costs by providing clarity and consistency. Colorado is among a few states evaluating comprehensive wildfire remediation protocols but may be the first to implement enforceable statewide standards. Public feedback on the draft is solicited through December 2024, with a scheduled virtual meeting for further discussion. These efforts reflect the increasing frequency and intensity of wildfires, driven by environmental factors, and highlight the evolving regulatory landscape for wildfire-related insurance claims and property remediation.