State-Specific Information
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      1. Insurance Agency Knowledge Base
      2. State-Specific Information

      Colorado

       

      Colorado Overview
      Time Zone Underwriting, Cancellation and Non-Renewal Periods
      Mountain Time Zone
      • The state’s new policy underwriting period is 60 days.
      • Non-Renewal: 30 days
      • Cancellation: 30 days after 60-day discovery period
      Prorate or Short-Rate Cancellation (Mid-Term) Premium Increase Notices
      If the insurer cancels the policy, the premium will be prorated without any penalty to the Insured, but the reason for cancellation must follow Statute 10-4-602. However, if the Insured cancels the policy, there is normally a short rate penalty that usually amounts to about 10% - 15% of the return premium. A notice of premium increase must be furnished 45 days before the effective date of the increase.
      Homeowners Line of Business
      Special State-Specific Considerations Over and Under Insurance
      • If a home is built above an old mine, before 1997, the insured is eligible to purchase additional Mine Subsidence coverage in event of an occurrence, however, residents of Colorado living in homes built after 1997 are not eligible for coverage.
      • Homeowners who live in higher risk properties, especially in the Wildland Urban Interface (WUI), may have to shop to find insurance and pay a higher premium that reflects increased risk.
      • Colorado is at risk for earthquakes, so an Insured should always consider earthquake coverage. Even though avalanches are caused by earthquakes, it is not covered under earthquake insurance or Homeowners insurance; a separate endorsement would be needed.
      		 Per Statue 10-4-114, no lender shall require a borrower under a loan secured by real property to provide hazard insurance coverage on that property in an amount exceeding the replacement value of the improvements on the property.
      Mortgagee-Bill Grace Period State-Specific Homeowners Documents and Discounts
      Lenders are required by law to make escrow account disbursements in a timely manner, on or before the due date to avoid a penalty, if the borrower’s payment isn’t over 30 days late. The Departments of Insurance in Colorado approved filings by certain carriers to give homeowners insurance discounts to Insureds living in communities recognized by the Firewise USA program that mitigates wildfire risks.
      Valued Policy State or Non-Valued Policy State Unique Home Construction
      Non-Valued Policy State Some homes are custom built in mountainous areas, in which designs are based on the steepness of the property and driveway and utility access.
      Residual Plans Deductibles
      Colorado does not have FAIR plan insurance or work with a joint underwriting insurance program; so, customers are urged to try to find coverage in the private market. The deductible for earthquake insurance usually is 10%–20% of the coverage limit. Depending on the policy, there may be separate deductibles for the dwelling, outside structures (such as outbuildings, detached garages and yard fences), and personal contents.
      Auto Line of Business
      Special State-Specific Considerations Unique State Coverages and Laws
      Hail is the natural peril that causes the most insured damage to Colorado vehicles. Therefore, it is important that an Insured maintains Comprehensive coverage. Colorado drivers are required to buy uninsured/underinsured motorist coverage and $5,000 in additional medical payments coverage unless they specifically reject it.
      Required State Limits Special Automobile Insurance Policies
      25/50/15 The CO AIP is often called a “market of last resort,” and was created to provide automobile insurance to eligible drivers who could not get coverage otherwise. It is not an insurance company, but rather an entity that assigns drivers to existing auto insurers that are licensed to do business in the state of Colorado.
      Financial Responsibility State-Specific Auto Documents, Discounts and Fees
      • The Insured will be required to maintain the state limits of 25/50/15. Actual requirements range from three months to three years depending on the reason for a license suspension or revocation.
      • For first-time drunken driving offenders, Colorado Statute 42- 2-132.5(4)(b)(II) provides an exception to the three-year rule. The law gives a judge the option to shorten the filing time frame for a first-time drunken driving offender to anywhere from four months to the maximum three years.
      		 None
      Stacking of UM Coverages Suspension Period
      Stacking is allowed Insurance is required immediately, before driving the vehicle. There is no grace period for proof of insurance.