Property Rules and Regulations

Colorado Rate Regulations for Property Insurance

References: C.R.S. 10-4-401; 10-4-403; 10-4-416

Colorado regulates the way insurers set and file rates for property insurance. The major requirements include:

Rates Must Not Be Excessive, Inadequate, or Unfairly Discriminatory

• Rates cannot be too high (excessive)
• Rates cannot jeopardize solvency by being too low (inadequate)
• Rates cannot unfairly discriminate among individuals with the same risk characteristics

File-and-Use System

Colorado uses a file-and-use rating system:

• Insurers file their rates with the Commissioner
• They may begin using the rates immediately unless specifically disapproved

No Rating Based on Disallowed Factors

Disallowed discriminatory rating factors include:

• Race
• Religion
• National origin
• Marital status (except allowed cases tied to risk, e.g., auto policy structure)

Supporting Documentation

Under 10-4-416, insurers must maintain documentation supporting how rates were developed and must provide it upon request by the Commissioner.

Summary Disclosure Form

References: C.R.S. 10-4-111; 10-4-636; Bulletins B-5.15; Reg. 5-2-16; 5-1-25; 5-1-26

Colorado requires insurers to provide clear, written explanations of specific policy features.

Purpose of Summary Disclosure Forms

To ensure consumers understand:

• Coverage limits
• Deductibles
• Exclusions
• Key definitions
• Optional coverages
• Claims processes

Auto Insurance Summary Disclosure

Under 10-4-636, insurers must provide a standardized disclosure form when issuing or renewing an auto policy, summarizing:

• Liability requirements
• UM/UIM coverage
• MedPay
• Policyholder rights (e.g., repair choice)

Homeowners Summary Disclosure

Bulletin B-5.15 requires insurers to clearly outline:

• Coverage A–D
• Replacement cost vs ACV
• Catastrophic deductibles
• Limits on certain personal property
• Water, mold, or weather exclusions

The summary does not replace the policy contract.

Use of Credit Information

References: C.R.S. 10-4-116; Reg. 5-1-25; 5-1-26

Colorado allows insurers to use credit information in rating and underwriting with strict limitations.

1. No cancellation or nonrenewal based solely on credit information.
2. Consumers must receive a notice of adverse action if credit negatively impacts the rate.
3. Insurers must re-rate the policyholder upon request if credit improves, but no more than once every 12 months.
4. Credit models must be filed with the Commissioner.
5. Prohibited credit factors include:
   • Number of credit inquiries not initiated by the consumer
   • Medical collections
   • Credit information affected by catastrophic events or identity theft

Property Insurance Regulations

Fraudulent Claims & Arson Information 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.

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 & 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.