10-3-1118. Failure-to-cooperate defense.

Statute text

(1) To plead or prove a failure-to-cooperate defense in an action concerning an insurance policy providing first-party benefits or coverage, each of the following conditions must be met before the defense is asserted in a court of law or an arbitration:

(a) The insurer has submitted a written request to the insured or the insured's representative for the information the insurer seeks via:

(I) Electronic means if the insured or the insured's representative has consented to receive electronic documents from the insurer; or

(II) Certified mail;

(b) The information is not available to the insurer without the assistance of the insured;

(c) The written request provides the insured sixty days to respond;

(d) The written request is for information a reasonable person would determine the insurer needs to adjust the claim filed by the insured or to prevent fraud; and

(e) The insurer gives the insured an opportunity to cure, which must:

(I) Include the furnishing of written notice to the insured of the alleged failure to cooperate, describing with particularity the alleged failure, within sixty days after the alleged failure; and

(II) Allow the insured sixty days after receipt of the written notice to cure the alleged failure to cooperate.

(2) A failure-to-cooperate defense acts as a defense to the portion of the claim materially and substantially prejudiced to the extent the insurer could not evaluate or pay that portion of the claim.

(3) The existence of a duty to cooperate in a policy does not relieve the insurer of its duty to investigate or to comply with section 10-3-1104.

(4) Any language in a first-party policy that conflicts with this section is void as against the public policy of Colorado.

(5) An insurer is not liable for a claim in a civil action based upon a bad-faith breach of contract under common law or under sections 10-3-1115 and 10-3-1116 because the insurer solely provides the insured with the required amount of time:

(a) To respond to the insurer's written request as specified under subsection (1)(c) of this section; and

(b) To cure the alleged failure to cooperate as specified under subsection (1)(e) of this section.

History

Source: L. 2020: Entire section added, (HB 20-1290), ch. 229, p. 1116, 1, effective September 14.

Annotations

 

ANNOTATION

Annotations

Law reviews. For article, "CRS 10-3-1118 -- Clarifying Cooperation in First-Party Insurance Policies", see 50 Colo. Law. 50 (Feb. 2021).

The legislature's purpose in enacting this section -- as reflected by its mandatory language and context within the statutory regime -- is to regulate and standardize when insurers may raise noncooperation, provide greater transparency for claimants, and simplify potential litigation over noncooperation issues. Wenzell v. United Servs. Auto. Ass'n, 2024 COA 40, 552 P.3d 1121.

Strict compliance with statutory conditions, rather than substantial compliance, is required before an insurer can assert a failure to cooperate defense. Wenzell v. United Servs. Auto. Ass'n, 2024 COA 40, 552 P.3d 1121.

Condition precedent in insurance contract does not supersede requirements of statute to meet conditions before an insurer can assert a failure to cooperate defense. Wenzell v. United Servs. Auto. Ass'n, 2024 COA 40, 552 P.3d 1121.

Applied in Dale v. State Farm Mut. Auto. Ins. Co., 699 F. Supp. 3d 1219 (D. Colo. 2023).