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

1. 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.