Colorado Court Ruling on Insurance Disclosure Compliance

A recent Colorado Court of Appeals ruling highlights the importance of compliance with state insurance disclosure laws. The court found that Esurance Property & Casualty Insurance Company violated regulatory disclosure requirements by not providing an automobile policy to an injured party within the required timeframe. This decision, by a three-judge panel, underscores the obligation for insurers to disclose policies that may impact liability claims, even if the policy isn't active during the incident.

Legal Obligations and Industry Implications

Judge Timothy J. Schutz led the court majority, affirming that Colorado law mandates disclosure of any policy relevant to a liability claim. Despite Esurance determining that coverage was ultimately unnecessary, the prolonged disclosure and confusion signaled non-compliance with regulatory statutes. This stands as a reminder for insurers to understand their policy obligations concerning claims to minimize risks associated with non-disclosure penalties.

The 2019 Legislation and Its Consequences

The case, triggered by a traffic accident involving Reesa Bohanan, emphasized the ramifications of Colorado's 2019 legislation. This law compels auto insurers to respond to claimant requests for policy information within 30 days or face a $100 daily penalty for noncompliance. Denver District Court Judge Kandace C. Gerdes supported this stance, leading to Esurance accruing $35,600 in penalties for delays.

This appellate decision, Bohanan v. Esurance Property & Casualty Insurance Company, serves as a critical reminder for insurance carriers to adhere to statutory compliance to avoid legal disputes and capital penalties. It stresses the significance of transparency and accurate disclosure in underwriting and claims processes, ensuring that insurers maintain adherence to regulatory compliance requirements.