My first blog as a member of Merlin Law Group is regarding the statute of limitations for certain actions in Colorado. I chose this topic since it is the first thing I analyze and advise a prospective client when I am contacted regarding a possible first party insurance claim.

The purpose of having statute of limitations is to promote justice, discourage unnecessary delay, and to forestall prosecution of stale claims.1 Their conclusive effects are designed to promote justice by preventing surprises through revival of claims that have been allowed to slumber until evidence has been lost and witnesses have disappeared.2 Pursuant to Colorado Revised Statute Section 13-80-101, the statute of limitations for a breach of property insurance contract in Colorado is three (3) years from the date the action accrues.

Colorado Revised Statute Section 13-80-108 defines the accrual date as the date both the damage to the property and the cause of the damage are known or should have been known by the exercise of reasonable diligence. Simply put, the date that the insured property sustained damage is the accrual date. This means that a lawsuit must be filed within three (3) years of the occurrence of the loss or, the date the insured property was damaged.

In cases where a tortious breach of contract is part of the causes of action against an insurer, Colorado Revised Statute Section 13-80-102 provides for a two (2) year statute of limitations. This means that a bad faith breach of insurance contract claim is governed by the two (2) year statute of limitations.3 For prospective clients, this means that although the statute of limitations for a breach of contract claim is three years from the date of loss, the shorter statute of limitations period of two years is what I use to determine the timing of the filing of a lawsuit to toll the statute of limitations if our client’s claim is against an insurer who did not treat the client fairly and failed to adjust the client’s claim in good faith.

My next blog will discuss Colorado’s unreasonable delay statutes.

1 Colorado State Bd. of Medical Examiners v. Jorgensen, 599 P.2d 869, 198 Colo. 275 (Colo. 1979).
2 Continental Bank & Trust v. Tri-State General Agency, Inc., 185 F. Supp. 208 (D. Colo. 1960).
3 See Cork v. Sentry Ins., 194 P.3d 422 (Colo. App. 2008).