Colorado is not Alone

Following up on the discussion regarding the recently passed Colorado law referenced below, it may come as a surprise to some that Colorado is not alone in passing a law that forbids insurance companies from preventing its insured from selecting which contractor will perform the repairs on the insureds property. I would guess that whether there is a specific law like this or not, no state would permit an insurance company from preventing its insured from using whichever contractor, or on auto claims, auto repair shop the insured preferred. Below is the text from the California Fair Claims Settlement Practices Regulations:

Section 2695.9. Additional Standards Applicable to First Party Residential and Commercial Property Insurance Policies
(a) When a residential or commercial property insurance policy provides for the adjustment and settlement of first party losses based on replacement cost, the following standards apply:
(1) When a loss requires repair or replacement of an item or part, any consequential physical damage incurred in making the repair or replacement not otherwise excluded by the policy shall be included in the loss. The insured shall not have to pay for depreciation nor any other cost except for the applicable deductible.
(2) When a loss requires replacement of items and the replaced items do not match in quality, color or size, the insurer shall replace all items in the damaged area so as to conform to a reasonably uniform appearance.
(b) No insurer shall require that the insured have the property repaired by a specific individual or entity.
(c) No insurer shall suggest or recommend that the insured have the property repaired by a specific individual or entity unless:
(1) the referral is expressly requested by the claimant; or
(2) the claimant has been informed in writing of the right to select a repair individual or entity and, if the claimant accepts the suggestion or recommendation, the insurer shall cause the damaged property to be restored to no less than its condition prior to the loss and repaired in a manner which meets accepted trade standards for good and workmanlike construction at no additional cost to the claimant other than as stated in the policy or as otherwise allowed by these regulations.


If you want to learn more about this, there are no shortage of blogs out there giving all kinds of advice on this topic. I enjoyed reading this one. http://premier-claim-consulting.blogspot.com/2007/02/whos-working-on-your-home.html