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360 Shawnee Lane is one to three adjacent lots for sale in the Sagamore neighborhood. Homes in the Superior neighborhood burned in the Marshall fire, and now lots left vacant are beginning to hit the market. Sagamore is appealing because of its location and because there is no HOA. (Steve Peterson, Special to The Colorado Sun)

As many as two-thirds of those who lost homes in the Marshall fire lack enough insurance to fully cover their rebuilding costs, according to a new analysis by the Colorado Division of Insurance.

The division has been looking at claims from 61 different insurance companies related to the Marshall fire, which destroyed more than 1,000 homes in Superior, Louisville and unincorporated Boulder County late last year, and the high-wind event that accompanied it. More than $1 billion in claims have been filed.

When examining claims filed by people who suffered a total loss, the division found that 92% have insurance without a guaranteed replacement benefit that would have rebuilt their homes no matter the cost. That puts the group at risk of being underinsured.

Exactly how many are underinsured depends on the cost to rebuild.

“We will continue to analyze the claims data as it comes in from the insurance companies,” Michael Conway, the state’s insurance commissioner, said in a statement. “However the challenge now and going forward will be nailing down reliable rebuilding costs.”

If it costs $250 per square foot to rebuild, then 36% of the policyholders are underinsured. If it costs $350 per square foot to rebuild, then 67% of the policyholders are underinsured. And, at that higher replacement cost, the average amount by which homeowners are underinsured is more than $240,000.

The division’s estimate for the total amount of underinsurance ranges from $39 million on the low end of building costs to $179 million on the high end.

Earlier this year, 9News reported that the Home Builders Association of Metro Denver expected rebuilding costs to be between $300 and $350 per square foot.

The federal Small Business Administration has approved more than $91 million in low-interest disaster loans for homeowners impacted by the Marshall fire, much of which the Division of Insurance expects will go toward helping with the underinsurance problem. But, with building costs over $300 per square foot, homeowners may still find themselves coming up short in trying to rebuild.

The division plans to schedule a town hall meeting to discuss the data during the week of May 16. More information will be posted on the division’s Marshall fire page when an exact date and time are nailed down.

John Ingold

John Ingold is a co-founder of The Colorado Sun and a reporter currently specializing in health care coverage. Born and raised in Colorado Springs, John spent 18 years working at The Denver Post. Prior to that, he held internships at the Rocky Ford Daily Gazette, the Colorado Springs...