A Failure-to-cooperate defense was enacted into Colorado first-party insurance law by statute in 2020.[1] Colorado provided conditions on a carrier pleading or proving "a failure-to-cooperate defense in an action concerning an insurance policy providing first-party benefits or coverage," however, regardless of whether "the defense is asserted in a court of law or an arbitration[.]"[2]
As a result of this statute, an underinsured motorist carrier accused of wrongful delay in paying first-party benefits and bad faith was granted summary judgment by the District Court for the insured's rather than the insurer's breach of contract. The sort of record necessary to reach similar results is displayed in the case in which the UIM carrier obtained its summary judgment: Aponte v. Allstate Fire & Cas. Ins. Co., No. 1:21-cv-01601-CNS-SKC, 2023 WL 129693, at *2 (D. Colo. Jan. 9, 2023).
[1] Colo. Rev. Stat. Ann. § 10-3-1118 (West; Westlaw current through legislation effective April 14, 2023 of the First Regular Session, 74th General Assembly [2023]).
[2] Colo. Rev. Stat. Ann. § 10-3-1118(1).
Breach of the cooperation clause in first-party insurance policies, particularly in the context of bad faith claims, is analyzed in 2 DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH § 11:7 (3d Edition West Publishing Company, 2023 Supplements in process).
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