The law prohibits an insurance company or its agent from:

§  Requiring that appraisals or repairs to the real or personal property be made or not be made by a specific repair business;

§  Representing to a claimant that the use of or failure to use a particular repair business may result in nonpayment or delayed payment;

§  Coercing, intimidating, threatening, or inducing by incentive, a beneficiary or claimant to use a particular business for repairs except that an inducement by incentive does not include Warranty or Guaranty of repairs;

§  Contracting with a person to manage, handle or arrange repair work for the insurer on the condition a business does claims work at a price established by the insurers and the person retains a percentage of any compensation paid by the insurer;

§  Using disincentives to discourage a beneficiary or claimant from using a repair business, not including warranty or guaranty repairs;

§  Soliciting or accepting a referral fee in exchange for referring the beneficiary or claimant to a repair business;

§  Requiring the beneficiary or claimant to travel an unreasonable distance to choose a repair business;

§  Misinforming a beneficiary or claimant to induce the use of a particular repair business; and

§  Requiring a third-party claimant to have repairs done by a particular repair business.

               The law requires an insurance company or its agent to:

§  Inform the beneficiary or claimant that they may select any repair business of their choosing;

§  Supply the beneficiary or claimant with a copy of the estimate upon which a settlement is based, when partial losses are settled based on an estimate prepared by or for the insurance company;

§  Confirm that any estimate prepared by or for the insurer to repair damages that are visible or evident at the time of inspection is adequate to restore the real or personal property within a reasonable time to its condition before the loss, in accordance with applicable policy provisions;

§  Pay for repair services and products based on the prevailing competitive price;

§  Assume all reasonable costs sufficient to pay for beneficiary’s or claimant’s repairs less any applicable deductible or reduction for comparative negligence;

§  Furnish the notice required by § 10-4-120 C.R.S. to the beneficiary or claimant for each claim;

§  Promptly pay the cost of the real or personal property repair less the deductible according to the terms of the insurance policy at no less than the prevailing competitive market in the same geographic area;

§  Disclose any ownership interest in, or affiliation with, a recommended repair business.

DAVID GARZA                                                                                                                              2/26/2009