Department of regulatory agencies Division of Insurance 3 ccr 702-5 Property and casualty



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Department of regulatory agencies

Division of Insurance

3 ccr 702-5

Property and casualty

Proposed Amended Regulation 5-2-15

CONCERNING CONSUMER PROTECTION FOR VEHICLE VALUATION AND RENTAL REIMBURSEMENT

Section 1 Authority

Section 2 BasisScope and Purpose

Section 3 Applicability & Scope

Section 4 Definitions

Section 5 Rules

Section 6 EnforcementSeverability

Section 7 SeverabilityEnforcement

Section 8 Effective Date

Section 9 History



Section 1 Authority

This regulation is promulgated under the authority of §§ 10-1-109, 10-3-1110 (2), 10-4-601.5 and 10-4-639 (3) (4), C.R.S.



Section 2 BasisScope and Purpose

The purpose of this regulation is to establish standards for payment of claims for vehicle rental and collision damage waivers, and for valuation of total loss claims under private passenger auto insurance policies.



Section 3 Applicability and Scope

This regulation shall apply to all insurers that provide automobile insurance policies.



Section 4 Definitions

A. “Total Loss”: means the Ccondition of a motor vehicle when it is damaged or destroyed to such an extent that the insurer determines it cannot be rebuilt or repaired to its condition prior to the loss; or the cost of the loss (including, but not limited to, rental expenses, specialized labor and part availability) make the repairs of the vehicle uneconomical.

B. “Valuation”: means the Mmethod of determining the worth of property that has been lost or damaged.

C. “Third-Party Claimant”: means the Iindividual other than the insured or the insurer who has incurred a loss or is entitled to receive a benefit payment as a result of the negligent acts or omissions of the insured.

D. “Collision Damage Waiver”: means the Sspecial property damage coverage purchased by an individual renting an automobile under which the rental company waives any right to recover property damage to the automobile from that individual regardless who is at fault.

Section 5 Rules

A. Total Loss Claims



(1.) The insurer shall develop and maintain written procedures that will be consistently used when determining the value of a vehicle declared a total loss.

(2.) Claims files shall include the credible source used for valuation by vendor name and the methodology for determining the amount of the loss. Claims files shall document that the valuation considered unique characteristics of a total loss vehicle, such as classic status, unique finishes, mileage and/or, special accessories.

B. Payment For Temporary Replacement of Damaged Motor Vehicles



(1.) An insurer shall provide payment to a third-party claimant for a collision damage waiver required by a motor vehicle rental company when the claimant does not have collision coverage, or coverage does not extend to a rental vehicle through his or her own motor vehicle insurance and the insurer may request the following:

(a.) Verification that the claimant did not have collision coverage on the damaged vehicle, at the time of loss, or that the collision coverage on his/her automobile policy does not extend to rental vehicles.; and

(b.) Verification that the Collision Damage Waiver was signed, by the claimant, indicating collision coverage was secured.

(2.) Payments for third-party coverage for a replacement motor vehicle, of a comparable class, shall not be discontinued until:

(a.) Three days after payment for the total loss of the motor vehicle was mailed, via US Postal Service, to the last-known address of the claimant or after an reasonable settlement offer has been tendered made in compliance with § 10-3-1104 (1) (h), C.R.S.; or

(b.) One day after payment for the total loss of the motor vehicle was transmitted via overnight delivery to the last-known address of the claimant or directly to the financial account of the claimant; or

(c.) Payment is made directly to the entity repairing the motor vehicle of the claimant; and the repaired vehicle is returned to the claimant; or claimant has a reasonable opportunity to take possession of the vehicle from the repair facility.

(3.) An insurer shall not be required to pay for a replacement motor vehicle or any portion of such expense directly related to delays by the claimant or delays by a repair facility selected by the claimant.

C. Failure to comply with this regulation constitutes an unfair or deceptive act or practice in the business of insurance.



Section 6 EnforcementSeverability

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.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 including the imposition of fines and/or suspension or revocation of a license.

Section 7 SeverabilityEnforcement

Non compliance with this regulation may result 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.If any provision of this regulation or the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of the regulation and the application of such provision to other persons or circumstances shall not be affected.

Section 8 Effective Date

This regulation shall become effective on December 1, 2004August 1, 2012.



Section 9 History

New regulation issued effective December 1, 2004.



Amended regulation effective August 1, 2012.

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