The End of Limiting Language in Homeowner’s Insurance Policies in Colorado

Since my last blog dealt with statutes of limitation, I thought it fitting to discuss a relatively new statute in Colorado, C.R.S. §10-4-110.8. This statute was effective as of January 1, 2014. It provides definitions of certain words, such as “additional living expenses coverage,” “claim,” and “recoverable depreciation,” among others. It also states that an owner of a condo may file a claim as if the owner were a named insured on the condo policy, provided certain conditions are met.

Another provision that comes up when I’m talking to policyholders states that an insurance company must make an electronic copy of the policy available to a policyholder within three (3) business days of the policyholder’s request, and a certified copy of the policy available within thirty (30) days. There are other good sections and the statute is definitely worth a thorough read. However, my favorite section comes at the very end. It states:

(12)(a) Notwithstanding any provision of a homeowner’s insurance policy that requires the policyholder to file suit against the insurer, in the case of any dispute, within a period of time that is shorter than required by the applicable statute of limitations provided by law, a homeowner may file such a suit within the period of time allowed by the applicable statute of limitations; except that this paragraph (a):

(I) Does not revive a cause of action that, as of May 10, 2013, has already been barred by contract; and

(II) Applies only to a cause of action that, as of May 10, 2013, has not been barred by contract.

(b) On and after January 1, 2014, an insurer shall not issue or renew a homeowner’s insurance policy that requires the policyholder to file suit against the insurer, in the case of any dispute, within a period of time that is shorter than required by the applicable statue of limitations provided by law.

This statute brings much needed good news to policyholders. Many insurance policies have limiting language requiring suit against the company to be brought within one year. That has now changed and the statutes of limitation are to be followed, rather than a contractual limitation period found in the policy language. Some states are generous with the statutes of limitation, but Colorado is not one of them, so I still encourage policyholders to act fast and fully pursue a claim at the earliest opportunity. So the next time you read the “Suits Against Us” provision in your insurance policy, remember that the language limiting the time to file suit may not apply.