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5 Colorado Home Insurance Laws You Should Know
Chances are if you have a mortgage, you’re holding a home insurance policy. While this type of policy is great to have in case of a disaster, did you know that there are some laws you didn’t know about in the great state of Colorado?
To help inform you more on the laws of home insurance, here are five things every resident should know…
The polices on using credit scores as criteria
If an insurer uses an underwriting criteria that would be using your credit score as part of the application process, you have the right to be informed of this criteria. This would make you aware that the insurer is digging up your credit history. Also, if an insurer issues a binder while assessing the potential risk of your home, the insurer must inform the homeowner that it can be cancelled anytime.
The policies regarding cancellation by mail
No insurer is allowed to cancel a policy unless certain requirements are met. First, the insurer should send the cancellation notice through first-class mail to the last known address of the homeowner on file. It should be sent no later than 30 days before the effective date of cancellation of policy. And third, the notice should include the reasons why the policy is being cancelled.
Some of the disallowed insurer practices
An insurer is not allowed to cancel or refuse renewal of the insurance coverage just because there has been an inquiry and the questions are not related to the actual claim of the insured home or property. No insurer is allowed to release information regarding a claim to any person or entity whose business is to monitor insurance claims or to a database that will be shared by insurers for underwriting purposes.
No insurance in fire prone areas
No insurer is allowed to issue a fire insurance policy to a homeowner whose property is located in a federally designated fire prone area. The refusal should be based on the zip code, location of the county and the distance to any incident of wildfire.
Right to be paid in a timely manner
All Colorado insurers must insure that they need to make a decision on a particular claim within sixty days after the receipt of such claim. The only exception is when there is dispute between the insurer and the homeowner concerning the claim as long as the insurer has complied fully with the terms and conditions of the insurance policy.
Owning a home can both be a great blessing and a huge responsibility. If you happen to own a home in Colorado there are things that you may need to know about home insurance. Your home and family’s future depends on your action today. While some of these laws may seem silly, it never hurts to know, just in case one of them comes around to haunt you.
Inez is from howmuchisit.org -- a large collection of guides that showcase the prices on just about anything. The next time you need a price on professional services or anything real estate related, be sure to check this resource out.
Before you make any decisions please fact check the Colorado laws for yourself.
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