Fraudulent Claims and Arson Reporting Act

References: C.R.S. 10-4-1001 through 1008; 10-1-128; Reg. 6-5-1

Colorado requires insurers to combat arson and fraud through reporting procedures.

Key Provisions

• Insurers must report suspected arson or fraudulent claims to law enforcement.
• Insurers must release claim information to law enforcement upon request.
• Immunity is granted to insurers who share information in good faith.
• Fraudulent claims are a felony, and insurers must maintain anti-fraud plans.

Insurance and Loans Secured by Real Property

Although not governed by a single statute, Colorado restricts certain lender practices:

• Lenders cannot force-place insurance unless the borrower fails to maintain required coverage.
• Coverage may not exceed the reasonable replacement value of the improvements (not total loan amount). Borrowers must receive notice before forced placement occurs.

Homeowners Insurance Regulations

Cancellation and Nonrenewal

Reference: C.R.S. 10-4-110.7

Reasons allowed for cancellation/nonrenewal include:

• Nonpayment of premium

• Fraud or material misrepresentation

• Substantial change in risk

• Multiple claims within a defined period (subject to limits)

Restrictions include:

• 45-day written notice required for nonrenewal
• Protective safeguards (e.g., alarms) cannot be used unfairly
• Claims for weather, fire, or non-fault losses cannot be sole grounds for nonrenewal

Required Coverages

References:C.R.S. 10-4-110.8; Reg. 5-1-25; 5-1-26

Homeowners policies must include:

• Disclosure of actual cash value vs replacement cost
• Explanation of depreciation
• Catastrophe deductibles
• Clear explanation of exclusions (mold, water backup, etc.)

Availability of Fire Insurance

References: 10-4-110.7; 10-4-110.9; 10-4-1801 through 1812; Reg. 5-1-17

Colorado maintains mechanisms to ensure fire insurance availability.

Fair Access to Insurance Requirements (FAIR) Plan

• Designed to provide coverage for homeowners in high-risk wildfire or urban blight areas.
• Applicants must show legitimate attempts to obtain coverage from standard markets.
• Rates must be adequate and non-discriminatory.
• The state can require insurers to participate in shared risk pools.