DEPARTMENT OF REGULATORY AGENCIES
Division of Insurance
3 CCR 702-5
property and casualty
Amended 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 9	History
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, and 10-4-641(1) C.R.S.
Section 2	Scope and Purpose
The purpose of this regulation is to interpret and implement the provisions of §§ 10‑4‑111 (1) and (5) and 10-4-636, of the Colorado Revised Statutes, to provide summary disclosure requirements and the summary disclosure form for private passenger automobile insurance.
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.	“Adequate Evidence” shall have the same meaning as set forth in § 10-4-636(3)(b), C.R.S. 
B.	“Commercial Automobile Insurance Policy”  means any policy issued pursuant to the requirements of  §§ 10-4-1401 et seq., C.R.S., where the organization or entity qualifies as an exempt commercial policyholder and the requirements outlined in the foregoing statute and Division Regulation 5-1-13 have been met. 
C.	“Initial Insurance Purchase” means when the application for insurance is submitted and payment is made to the insurer or producer. 
D.	“Optional or Enhanced Coverages” means those coverages that will result in an increased premium to an insured’s policy, and for which the express consent of the insured is required, but does not include uninsured or underinsured motorist coverage or medical payments coverage.  
E.	“Summary Disclosure Form” means the form that contains an explanation of the major coverages and exclusions of an insurer’s automobile insurance policy, together with a recitation of general factors considered in cancellation, nonrenewal and increase-in-premium situations. 
Section 5	Rules
A.	Summary Disclosure Form   
1.	The summary disclosure form shall provide notice in bold face letters that the policyholder should read the policy for complete details and that such summary disclosure form shall not be construed to replace any provision of the policy itself.   
2.	Insurers and producers shall use the attached summary disclosure form as outlined in Section 5(B).  Insurers and producers shall not modify this form except to provide additional or more specific information.  Insurers shall place this form on file with the Colorado Division of Insurance (Division) for public inspection.   
3.	Every insurer shall update and file with the Division the summary disclosure form periodically to reflect changes in major coverages and exclusions of such policies of insurance and changes in factors considered in cancellation, nonrenewal and increase-in-premium situations. 
B.	Disclosure Requirements 
1.	A licensed insurer or producer writing automobile insurance coverage must provide the summary disclosure form to applicants for insurance coverage, at the time of the initial insurance purchase and thereafter on any renewal when there are changes in major coverages and exclusions or changes in factors considered in cancellation, nonrenewal and increase-in-premium situations.   
2.	The summary disclosure form must be delivered to the applicant at the time of the initial insurance purchase (or renewal when applicable).  Such delivery may be made in the following manner: through the insurer or producer’s internet web site; by hand-delivery, facsimile or e-mail to the applicant; or if none of the foregoing modes of delivery are available, by placing a copy of the form in the mail to the applicant within 48 hours of purchase.  
3.	The summary disclosure form is a required form.  If there is a dispute after inception of the policy regarding whether the summary disclosure form was provided at the time of the initial purchase of the policy (or renewal when applicable), the insurer or producer must be able to provide evidence that the summary disclosure form was provided to the applicant or insured, otherwise the presumption will be that the summary disclosure form was not provided to the applicant or insured.   
4.	The explanation of medical payments coverage is required in the summary disclosure form.  The insurer must issue policies with $5000 medical payments coverage unless its insured rejects such coverage in writing or in the same medium in which the application for the policy was taken.  Nothing in this section shall prohibit the insurer from offering higher medical payments limits. 
5.	The disclosure requirements outlined in this Regulation do not apply to policies insuring exempt commercial policyholders as defined in §§ 10‑4‑1401, et seq., C.R.S.  
C.	Additional Disclosure Requirements   
1.	An insurer must provide a clear explanation to the insured regarding: 
a.	The products purchased; 
b.	The amount of coverage purchased; and
c.	How the determination of fault in an automobile accident affects the applicability of coverage. 
2.	The additional disclosure requirements outlined in Section (C)(1) above may be satisfied by including the information in the Declarations page of the policy or in a separate disclosure form. 
D.	Optional and Enhanced Coverages 
1.	An insurer or producer shall not automatically add optional or enhanced coverages that will result in an increased premium to an insured’s policy without the express consent of the insured.
2.	The consent of the insured may be provided in the same medium in which the policy is offered.  The insurer or producer shall maintain adequate evidence of the insured’s consent for at least three years.  Such evidence shall be subject to review by the commissioner. 
3.	An insurer or producer must record whether the optional or enhanced coverage added for an increased premium was requested by the insured or recommended by the insurer or producer and consented to by the insured.   
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 §10-3-1101 et seq., C.R.S. may be applied.  
Section 8	Effective Date
This regulation shall become effective January 1, 2009.
Section 9	History
New regulation effective January 1, 2007.
Amended regulation effective January 1, 2008.
Amended regulation effective January 1, 2009.

COLORADO PRIVATE PASSENGER AUTOMOBILE INSURANCE
SUMMARY DISCLOSURE FORM
This summary disclosure form is a basic guide to the major coverages 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 COMPLETE DETAILS!  THIS SUMMARY DISCLOSURE FORM SHALL NOT BE CONSTRUED TO REPLACE ANY PROVISION OF THE POLICY ITSELF. 
Complete details includes, but is not limited to, information on the method your insurer uses to calculate your unearned premium (e.g., pro rata or short rate), if you should cancel your policy mid-term or before the next renewal. This summary disclosure form also provides the factors considered for cancellation, nonrenewal and increase-in-premium.  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 insurer for further information.  See the information on the attached pages.

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 COVERAGES
A.	Uninsured and Underinsured Motorist Coverage 
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.
Generally, an underinsured automobile is an automobile whose liability coverage is not enough to pay the full amount you are legally entitled to recover as damages.
Coverage may be available under multiple policies in certain circumstances.  For example, a passenger in a vehicle that is not at fault in the accident may have uninsured or underinsured coverage under the policy covering the vehicle and the passenger’s own policy on their vehicle(s) not involved in the accident.  This adding of limits under two or more policies is commonly referred to as stacking.
Please consult your agent or insurer if you have any questions or for further details.
EXCLUSIONS - UNINSURED AND UNDERINSURED MOTORIST COVERAGE.  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 Coverages – Collision and Comprehensive
You must be offered collision coverage.
Collision coverage pays for damage to your own automobile.  It provides coverage when your 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.    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 
Your policy provides medical payments coverage of $5,000 unless you reject it in writing, or in the same medium in which you completed the application for the policy.
Medical payments coverage pays for reasonable health care expenses incurred for bodily injury caused by an automobile accident, regardless of fault, up to the policy limits chosen by the insured.
Your insurer must prioritize payment of the medical payments coverage benefits in a manner consistent with § 10-4-635 (2) (b), C.R.S. 
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 as defined in § 10-16-102(22.5), C.R.S.
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.                            
	D.	Uninsured Motorist Property 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 AND INCREASE IN PREMIUM 
	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 may be added or an accident free discount removed as a result of an at-fault accident or traffic conviction.
The following conditions may increase your premium:	
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.
The above list of factors and conditions is not all inclusive and there may be other factors or conditions that increase your premium.