About 18 months after the Waldo Canyon fire in Colorado Springs, a fire survivor wrote to let us know they had finalized their claim and even gotten all of their code upgrade coverage. In their case they weren't underinsured. Here is how they did it.

First of let’s see the numbers. I’m going to change the numbers to make it easier to understand.

Coverage A was stated on the declarations page as $500,000. They had extended replacement at 25% or $125,000. The ordinance and law (OL) portion of the policy stated that the insurance company would cover 10% of the dwelling portion of the claim. This language is important as some OL coverage specifically states that they cover 10% of the stated limit of A, not 10% of the dwelling. What’s the difference? Let’s see!


A             $500,000
25%        $125,000
Dwelling   $625,000

10% of dwelling is $62,500 (OL coverage)
Total coverage is $625,000+$62,500=$687,500

A             $500,000
25%        $125,000

10% of A is $50,000  (OL coverage)
Total coverage is $625,000+$50,500=$675,000 ($12,500 less than above)

In this survivor’s case the insurance company’s scope of loss stated their loss at about $650,000. The total cost to rebuild was actually about $685,000. Also of note, in this policy (as in most policies) the OL is only paid after it’s incurred so they had to actually take the money out of their pocket before they were paid the OL portion of their claim.

Although the homeowner was hesitant to sign a contract for $63,000 more than the insurance company would promise to pay (as OL coverage is notoriously difficult to document and collect), they bit the bullet and signed a contract with the contractor for $688,000. During the rebuild process the insurance company ponied up the first $625,000 as needed to rebuild, but towards the end when they needed the OL funds is when the struggle began.

Ultimately the contractor had to create documentation that outlined each and every item that was required by law that WAS NOT included in the house that was lost. This required a high degree of knowledge about the codes and the house as it stood before the fire. The homeowner stated, “There were about 10 attachments of documentation of code and ordinance changes, a huge spreadsheet showing specific citations, and in the end, documentation of every dollar spent on the house.” The cost of the house was JUST above the $687,500 which was key to getting the additional OL funds.

One of the big struggles was to get the insurance company to understand the $12,500 difference between 10% of coverage A only and 10% of the entire dwelling coverage (illustrated above). Writing a concise letter explaining the coverage was key. This is a summary of how it was explained to the insurance company:


This is my coverage as I understand it:

      25% of A=$125,000
Total dwelling=$625,000

OL Coverage =10% of dwelling or $62,500
Grand total A + OL=$687,500

You [the insurance company] have already stated that you estimate the loss at $650,000. The cost of the upgrades required by law are shown in the attached document [that the contractor had to create].

Since the total to rebuild my house was $688,000 [documentation showing money spent attached], my coverage was $687,500. Since you have already paid me $625,000 of coverage A please send a check for the balance of $62,500.


The homeowner said “It was a process that required much documentation, much waiting, and much tenacity and patience.” In the end though they were very glad they followed through with thoroughly documenting their loss and learning enough about their policy to replace their house will full like kind and quality.

One last note, you can use our Interactive Loss Worksheet to help keep track of how much the insurance company has paid you. Download it HERE.

Inspirational Quotes

The problem is not that there are problems. The problem is expecting otherwise and thinking that having problems is a problem.

Theodore Rubin


Thanks to you and your website which has so much good information, I thank you from the bottom of my heart.

Waldo Canyon Fire Survivor, 2012