A Colorado appeals court has ordered Esurance to pay $35,600 in penalties for failing to provide an auto insurance policy within the state’s required 30-day deadline. The case centers on a policy that, while ultimately not covering the accident, was still considered potentially relevant under Colorado’s insurance disclosure law.
The incident began on the morning of August 31, 2022, when Yeraldy Ugalde Arteaga ran a red light and collided with Reesa Bohanan’s vehicle. Shortly after the crash, at 9:03 a.m., a third party purchased an Esurance policy adding Arteaga as an insured. Bohanan’s attorney requested a copy of this policy on September 7. Esurance then opened a claim file and began investigating the situation.
For several weeks, Esurance appeared to believe the policy might cover the accident. They set aside $17,100 for bodily injury and noted coverage seemed likely as of September 30. However, by October 11, they realized the policy was purchased after the collision had happened. Two days later, Esurance sent a denial letter informing Bohanan’s attorney that the policy did not cover the accident because it became effective after the crash. The letter did not include the policy itself.
Colorado law requires insurers to provide policy details within 30 days of a written request. Esurance missed this deadline by a wide margin, only sending the policy on September 29, 2023 — nearly a year late. Because of the late disclosure, the court ruled that Esurance owes $100 per day, amounting to $35,600 in penalties.
The court’s ruling focused on the law’s goal of transparency. It emphasized that insurers cannot withhold policy information simply because they eventually decide there is no coverage. Instead, what matters is whether the policy could have been relevant when the request was made. Since Esurance initially thought the policy might apply and set aside funds, they were obligated to turn over the documents within the deadline.
A dissenting judge disagreed, arguing that a policy not in effect at the time of an accident cannot be relevant and should not require disclosure. This judge warned that the majority’s interpretation could lead to endless disclosure demands for policies that clearly do not cover a claim without clearer guidance from the state legislature.
The case now returns to the trial court to finalize the penalty payment and review whether Bohanan should receive attorney fees. For insurers in Colorado, the ruling signals that any uncertainty about coverage during the response period does not excuse failing to share policy information promptly, even if coverage is later denied.