Chubb faces an ALE fight in Colorado after a total-loss house fire and months of disputed claims handling.
Sean and Cassi Rooks have sued Chubb Insurance Company and Vigilant Insurance Company in federal court in Colorado, alleging unreasonable delay and partial denial of benefits tied to Additional Living Expenses after a late September 2024 fire destroyed their primary residence in Cortez. The filing, made December 4, 2025, focuses on how ALE applies when insureds temporarily occupy a separate, LLC-owned rental on the same ranch while seeking to maintain their “usual standard of living.” The case is in early stages, and no court decisions have been made.
According to the filing, the claim was initially handled by a senior general adjuster, then reassigned to a Special Investigations Unit investigator after the carrier allegedly received false neighbor reports suggesting contents were removed before the fire. The Rooks say they cooperated fully—sitting for examinations under oath, hosting site visits, and providing driveway game camera footage and firefighter observations to address the content-removal issue. On November 21, 2024, they walked the investigator through remnants of specific items at the burn site.
The scope of the investigation became a flashpoint. The investigator requested 2024 credit card and bank statements, documents relating to a separate property owned by 842 Holdings LLC, and purchase receipts, prompting the Rooks to retain counsel. On January 3, 2025, the insurer told them it would stop pursuing the previously requested items and returned the claim to the general adjuster. Demolition of the destroyed home was authorized on January 14, payments for certain undisputed coverages were issued on January 22, and demolition was completed in February.
The remaining fight is over ALE. The complaint quotes policy language describing ALE as covering extra living expenses, loss of fair rental value, and forced evacuation expenses. It also notes a clause stating that if “Limited additional living expenses” is listed in the coverage summary, that figure caps payment—while the Rooks say no such limit appears on their summary. Another cited clause states the insurer covers “the reasonable increase in your normal living expenses that is necessary to maintain your household’s usual standard of living.”
After the fire, the Rooks moved into the 842 Holdings property—about 2,000 square feet and intended as a rental—while their destroyed home was nearly 3,200 square feet with higher-end finishes. In a March 21, 2025 letter, they pointed to comparable rentals in Durango at about $4,000 per month and said boarding five horses would average $2,200. They later proposed a monthly ALE figure of $9,280.
In an April 15, 2025 response, as described in the filing, the insurer said it could not reimburse the Rooks for residing in a property they already own and stated that adjustment of ALE involves reimbursing covered expenses or making advance payments when such expenses will be incurred. It also said the 842 Holdings property is not covered under the policy and that potential income or revenue from that property cannot be considered for ALE. A subsequent letter dated August 14, 2025 reiterated that ALE coverage was available but not substantiated under the policy, stated the policy does not provide reimbursement based on hypothetical rental value, and said lost rental income from a property not covered under the policy is not reimbursable.
The Rooks assert breach of contract, bad-faith breach of insurance contract, and violations of Colorado’s claim‑handling statutes, seeking attorneys’ fees, costs, interest, and two times the covered benefit. The filing reflects allegations only, and there has been no court determination to date.
