Appraisal clause bill debated heatedly; amendment adopted but committee postpones measure

Representative Kelty presented House Bill 26‑1247 to codify appraisal provisions in homeowners insurance policies and described it as a consumer‑protection and transparency measure intended to preserve an appraisal option that currently appears in many policies. Kelty said the provision would take effect in January 2027 and would not change coverage requirements.

Proponents — including Larry Baish of United Policyholders, contractor Kyle Larson, appraiser Steve Ziegler and public adjuster Brett Allen — told the committee appraisal is a longstanding tool for resolving disputes over scope and cost of repairs without litigation and that codifying the process protects homeowners when insurers alter policy forms. Witnesses stressed appraisal’s speed and lower cost compared with lawsuits.

Opponents — including attorney Hillary Patterson and defense‑side counsel Kayla Scroggins — said the draft contains vague language, may create new avenues for litigation in Colorado’s legal environment and could conflict with Colorado Supreme Court precedent (Dakota Station), which requires appraisers to be impartial. Opponents warned the bill could expand opportunities for abusive appraisal‑driven litigation and potentially raise premiums.

Representative Kelty accepted stakeholder changes in Amendment L001, which narrowed who may serve as appraisers and added a good‑faith review requirement when a third‑party damage assessment presents materially new information; the committee adopted that amendment. After debate and a failed attempt to move the bill as amended (initial roll call noted a 5‑8 split), the committee voted to postpone HB 26‑1247 indefinitely by reverse roll call, 9‑4.

Committee members split along lines of consumer‑protection concern versus legal and fiscal risk: some members expressed support for keeping appraisal options available for ordinary homeowners, while others worried the bill would invite more litigation and urged further stakeholder work and input from the Division of Insurance.

Because the committee adopted the postponement, HB 26‑1247 will not advance from this hearing.