Insurers and their lobbyists have pushed through the complete elimination of B-5.1 in Colorado. This gives insurers not only ammunition to depreciate contractor’s overhead and profit but weakens the argument that it should be included on every claim, regardless of whether a general contractor is engaged or not.

The proposed withdrawal of B-5.1 should not happen. The removal not only goes against policyholders’ best interests, but the removal of B-5.1 also incentivizes insurance companies to wrongfully to underpay and delay claims. In addition, contractors will be negatively impacted. Removing B-5.1 means contractors would only be paid a part of the replacement costs because Colorado would allow the deduction of Overhead and Profit.

Act now and voice your opinion by 2/15/2019 to keep Bulletin B-5.1 in Colorado.

Here’s What To Do

  1. Review B-5.1 (links and info below)
  2. If you agree that B-5.1 should be kept, format a clear & concise “comment” to send to DORA by 2/15
    1. Include your name and information about your company
    2. Be clear and concise with your position to keep B-5.1
    3. Provide examples on how the removal of B-5.1 would negatively impact Colorado policyholders
  3. Send your comment to by 2/15/2019

While you may feel compelled to include colorful language and tell DORA how you really feel, this is not the time to do that. Quality and quantity of the comments made by 2/15 are essential.

Click here to download our response template. 

Bulletin B-5.1 In A Nutshell

Overhead and profit have been included with payments on ACV claims since Bulletin B-5.1 was introduced by The Colorado Department of Regulatory Agency (DORA) in 1998. Currently, the bulletin says that insurers should pay O&P on the ACV check if an insured has an RCV policy. Bulletin No. B-5.1 specifically states:

Insurers shall be prohibited from deducting contractors’ overhead and profit in addition to depreciation when policyholders do not repair or replace the structure.


The position of the Division of Insurance is that the actual cash value of a structure under a replacement cost policy, when the policyholder does not repair or replace the structure, is the full replacement cost with proper deduction for depreciation. Deduction of contractors’ overhead and profit, in addition to depreciation, is not consistent with the definition of actual cash value.

Currently, this means insurers CANNOT deduct O&P and Depreciation if policyholders elect not to repair.

Should O&P Be Included With Payments On ACV Claims?

Yes. Deduction of O&P along with Depreciation is not consistent with the definition of ACV, and several existing bulletins from other states support that opinion. Click below to read them.

Florida Insurance Bulletin

Texas Insurance Bulletin

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