Colorado Department of regulatory agencies	 
Division of Insurance
3 ccr 702-5
proposed NEW regulation 5-2-16
disclosure requirements for private passenger automobile policies
Section 1	Authority
Section 2	Scope and Purpose
Section 3	Applicability
Section 4	Definitions
Section 5	Rules
Section 6	Severability
Section 7 	Enforcement
Section 8	Effective Date
Section 1	Authority
This regulation is promulgated and adopted by the Commissioner of Insurance under the authority of §§ 10-1-109, 10-4-111(5), 10-4-601.5, 10-4-636, 10-4-641(1) C.R.S.
Section 2	Scope and Purpose
The purpose of this regulation is to interpret and implement the provision of Part 6 of Article 4 of Title 10 of the Colorado Revised Statutes and to provide summary disclosure requirements and form for private passenger automobile.
Section 3	Applicability 
This regulation shall apply to all licensed insurers or producers in Colorado issuing private passenger automobile policies pursuant to Part 6 of Article 4 of Title 10 of the Colorado Revised Statutes.  
Section 4	Definitions
A.	“Commercial Vehicle” means any four-wheel motor vehicle with a load capacity of fifteen hundred pounds or more which is used in the occupation, profession or business of the insured or which is used as a public or livery conveyance or a rental vehicle or licensed as a commercial vehicle.
B.	“Optional” means those coverages that are not required by law.	
C.	“Enhanced” means decreased deductibles, increased limits or benefits on existing coverages.

Section 5	Rules
A.	Insurers and producers shall use the attached summary disclosure form.  Insurers and producers shall not modify this form except to provide additional or more specific information.  Insurers and producers shall place this form on file with the Colorado Division of Insurance (Division).
B.	Disclosure Requirements
1.	A licensed insurer or producer writing automobile insurance coverage must provide, at the time of application, the attached summary disclosure form including explanations of coverages, exclusions, reasons for cancellation, non-renewal and increase in premium.
2.	A licensed insurer or producer writing automobile insurance coverage must update and file with the Division the updated disclosure form to reflect any major changes in coverages, exclusions and reasons for cancellation, non-renewal and increase in premium.  
3.	The insurer or producer must provide its insured a revised summary disclosure form at renewal when there have been changes in the coverages or procedures as indicated in the revised summary disclosure form.
4.	The explanation of medical payments coverage is required in the disclosure form.  If this coverage is not offered, it must be indicated in the form.
5.	The description and explanations included in the summary disclosure form will satisfy the additional requirements of providing a clear explanation of the products and coverage purchased.
6.	The disclosure requirements do not apply to policies insuring commercial vehicles.
7.	The insurer must disclose in this disclosure form the method it uses for calculating the earned and unearned premium when an insured elects to cancel the policy prior to the end of the policy term.
C.	Suitability Requirements
1.	  An insurer must provide a clear explanation to the insured regarding:
a.	Coverage purchased;
b.	Limits or amount of coverage purchased;
c.	How the determination of fault in an automobile accident affects the applicability of coverage.
2.	The explanation may be provided in the same medium in which the policy is offered at time of offer or when the policy is issued.
3.	An insurer or producer must provide an explanation concerning any coverage change and must document whether the optional or enhanced coverage was requested by an insured or recommended by the insurer or producer and accepted by the insured.
4.	An insurer or producer shall retain evidence of the insured’s consent for a minimum of three years.
Section 6	Severability
If any provision of this regulation or the application of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected.
Section 7	Enforcement
Noncompliance with this Regulation may result, after proper notice and hearing, in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance or other laws which include the imposition of fines, issuance of cease and desist orders, and/or suspensions or revocation of license.  Among others, the penalties provided for in §10-3-1108, C.R.S. may be applied.
Section 8	Effective Date
This regulation shall become effective on January 1, 2007.

COLORADO PRIVATE PASSENGER AUTOMOBILE INSURANCE
DISCLOSURE FORM

This disclosure form is a basic guide to the major coverage and exclusions in your policy.  It is only a general description and not a statement of contract or a policy of any kind.  All coverage is subject to the terms, conditions, and exclusions of your policy and all applicable endorsements.
PLEASE READ YOUR POLICY FOR DETAILS!  In the event of any conflict between the policy and this disclosure form, the provisions of the policy shall prevail.
This disclosure also provides some guidelines for cancellation, nonrenewal, increase in premium and changes in coverage.  These factors are general in nature and do not represent the only reasons a policy may be terminated or changed.  Please contact your agent or company for further information.

I.	REQUIRED COVERAGES
	Colorado law requires you to carry liability coverage on your automobile.
	Liability coverage pays for bodily injury to another person and for property damage to another’s property caused by the negligent (at-fault) operation of your automobile up to the limits of your policy.
	EXCLUSIONS—LIABILITY COVERAGE—Coverage is not provided for any automobile owned by you or a resident relative that is not insured for liability under your policy.  There is no coverage for intentional acts.  Other exclusions are listed in your policy.
II.	OTHER COVERAGE
	A.	Uninsured/Underinsured Motorist Protection 
You must be offered uninsured and underinsured motorist coverage, and it will be included in your policy unless you reject it in writing.
Uninsured Motorist coverage pays for bodily injury that you are entitled to collect from a hit-and-run or uninsured driver who is at fault for the accident.
Underinsured Motorist coverage pays for bodily injury that you are entitled to collect from an underinsured owner or driver who is at fault for the accident and when the damages exceed the driver’s liability coverage.
An underinsured automobile is an automobile whose liability coverage is less than the amount of uninsured motorist coverage under your policy.
Any coverage for a person who occupies an automobile they do not own is excess over any other similar insurance available to such occupant.
You cannot add together two or more limits of insurance on a policy covering multiple automobiles or on multiple policies covering you as an insured.  This adding of limits is commonly referred to as stacking.                                                                                                        [Companies include these two sentences only if applicable.]
EXCLUSIONS—UNINSURED/UNDERINSURED MOTORIST PROTECTION.  Coverage is not provided for any insured who, without the written consent of the insurer, settles with any person or organization who may be liable for the bodily injury.  Other exclusions may be listed in the policy.
	B.	Physical Damage Coverage – Collision and Comprehensive
Collision coverage pays for damage to your own automobile.  It provides coverage when our automobile collides with another automobile or object, or if your automobile overturns.
Comprehensive coverage pays for damage to your automobile from causes such as fire, theft, vandalism, hail, and falling objects.
Collision and comprehensive coverage may be written with a deductible.  A deductible is that part of a loss for which you, the insured, are responsible.  Your insurer will pay for the balance of covered repairs subject to your policy provisions.  A lender may require you to purchase both collision and comprehensive coverage.
EXCLUSIONS – COLLISION AND COMPREHENSIVE.  Coverage does not apply to losses that occur while your automobile is rented or leased to others.  There is no coverage for wear, tear, freezing, mechanical failure or breakdown, or road damage to tires.  Comprehensive coverage does not provide coverage for collision with other objects or if your automobile overturns.  Additional restrictions may apply to special equipment.  [The statement on special equipment should be included only if it is applicable.]  Other exclusions are listed in your policy.
	C.  	Medical Payments Coverage is an optional coverage you may choose to purchase.  It pays for reasonable medical expenses incurred for bodily injury caused by an automobile accident, regardless of fault, up to the limits you purchase.
Medical payments coverage is primary to any health insurance coverage available to an insured when injured in an automobile accident.
Medical payments coverage applies to any coinsurance or deductible amount required to be paid by the person’s health coverage plan.
An insured that is injured in an automobile accident will not receive benefits from medical payments coverage for any medical expenses incurred as a result of an accident that is the fault of the insured unless medical payments coverage is purchased.  
Read your policy to see who is a covered person under medical payments coverage.                            [If a company does not offer medical payments coverage, note that here.]
	D.	Uninsured Motorist Physical Damage
This is an optional coverage you can request if you do not have collision coverage on your vehicle.
	1.	Uninsured Motorist Property Damage (UMPD) pays for damages to your vehicle caused by an at-fault owner of an uninsured motor vehicle.
	2.	UMPD will not pay if the vehicles do not physically make contact.
	3.	UMPD only covers actual cash value of your vehicle or cost of repair or replacement, which ever is less.
III.	CANCELLATION, NONRENEWAL, INCREASE IN PREMIUM, AND CHANGES IN COVERAGE
	A.	Cancellation
During the first 59 days your company may cancel your policy for any reason that is not unfairly discriminatory or prohibited by law.  After your policy has been in effect for more than 59 days, your company may cancel your policy for any of the following reasons:
		1.	Failure to pay your premium when it is due;
		2.	 Knowingly making a false statement on your application for an automobile policy;
		3.	A driver’s license suspension or revocation during the policy period for you, a member of your household, or any other driver who regularly uses your automobile.
	
	B.	Nonrenewal
Your company may choose to non-renew your policy.  Some examples of reasons for nonrenewal include, but are not limited to:
		1.	An unacceptable number of traffic convictions;
		2.	An unacceptable number of negligent (at-fault) accidents;
		3.	Conviction of a major violation such as drunk driving or reckless driving.
	C.	Increase in Premium
	The following factors may increase your premium.
A premium surcharge is added or an accident free discount is removed as a result of an at-fault accident(s) or traffic conviction(s).
	Conditions that may increase your premium include, but are not limited to:	
		1.	Change of garage location of the automobile;
		2.	Change of automobile(s) insured;
		3.	Addition of driver;
		4.	Change in use of your automobile;
		5.	A general rate increase.  This results from the loss experience of a large group of policyholders rather than from a loss suffered by an individual policyholder.  A general rate increase applies to everyone in the group, not just those who had losses.
	D.	Changes in Coverage
A number of situations may change the insurance coverage you have.  For example, you may choose to increase or reduce your limits or deductibles or remove specific, non-mandatory coverage.  Your company may elect to increase your deductible(s) or to exclude specific driver(s) on renewal
These factors are general in nature and do not represent the only reasons a policy may be terminated or changed.
Please contact your agent or company with any questions about changes in coverage that you wish to make or about changes that your company has made.
IV.	LOWERING YOUR COSTS
Although the general classifications used by insurance companies to set rates may be beyond your control, it is possible to reduce the cost of your automobile insurance without giving up necessary protection.  Here are some tips:
Maintain a Good Driving Record – Traffic convictions and at-fault accidents usually result in higher premiums.
Consider the Highest Deductible You Can Afford – Insurance should protect you from major losses.  Choosing a higher deductible may result in lower premiums.
Check With Your Insurance Agent or Company Before you Buy or Lease a New Automobile – Insurance rates are higher for some makes and models of automobiles than for others.
Consider the Age and Condition of Your Automobile – Some optional coverage may not be practical for an older automobile.
Ask if You Are Eligible for Discounts – Some companies offer discounts such as good student, driver training, multi-car, anti-theft device, anti-lock brake device, seat belt, air bag and for drivers aged fifty-five years or older who complete a driver’s education course.
	Compare Coverage, Premiums, And Service When You Shop For Insurance.