Motor Vehicle Service Contract Insurance

C.R.S. tit. 42, art. 11

in effect

C.R.S. § 42-11-101 Definitions

42-11-101. Definitions. As used in this article, unless the context otherwise requires: (1) "Mechanical breakdown insurance" means an insurance policy, contract, or agreement, as defined in section 10-1-102 (12), C.R.S., that undertakes to perform or provide repair or replacement service, or indemnification for that service, for the operational or structural failure of a motor vehicle due to a defect in materials or skill of work or normal wear and tear, and that is issued by an insurance company authorized to do business in this state. (2) "Motor vehicle" means any vehicle subject to registration under section 42-1-102 (58) or any powersports vehicle as defined in section 44-20-402 (11). (3) (a) "Motor vehicle service contract" or "service contract" means a contract or agreement between a provider and a service contract holder, which contract or agreement is given for consideration over and above the lease or purchase price of a motor vehicle and obligates the provider to perform or provide repair or replacement service, or indemnification for that service, for the operational or structural failure of a motor vehicle due to a defect in materials or skill of work or normal wear and tear. A motor vehicle service contract may provide for any one or more of the following services: (I) Repairing or replacing tires or wheels on a motor vehicle damaged as a result of coming into contact with road hazards; (II) Removing dents, dings, or creases on a motor vehicle that can be repaired using the process of paintless dent removal without affecting the existing paint finish and without replacing vehicle body panels, sanding, bonding, or painting; (III) Replacing or repairing a windshield damaged by road hazards; (IV) Replacing a motor vehicle key or key fob if the key or key fob becomes inoperable or is lost or stolen; (V) Other services that are similar to the services listed in this paragraph (a). (b) "Motor vehicle service contract" or "service contract" does not include mechanical breakdown insurance. (4) (a) "Motor vehicle service contract provider" or "provider" means a person who, in connection with a motor vehicle service contract: (I) Incurs the obligations and liabilities to the service contract holder as set forth in the contract; and (II) Issues, makes, provides, sells, or offers to sell the contract. (b) A motor vehicle dealer who sells a motor vehicle that is the subject of a motor vehicle service contract is not a "provider" unless the dealer also satisfies both of the conditions set forth in paragraph (a) of this subsection (4). (5) "Motor vehicle service contract reimbursement insurance policy" or "reimbursement insurance policy" means a policy of insurance providing coverage for all obligations and liabilities incurred by a motor vehicle service contract provider under the terms of a motor vehicle service contract issued by the provider. (5.5) "Road hazard" means a hazard that is encountered while driving a motor vehicle. "Road hazard" may include potholes, rocks, wood debris, metal parts, glass, plastic, curbs, or composite scraps. (6) "Service contract holder" means a person who purchases a motor vehicle service contract.

C.R.S. § 42-11-102 Reimbursement policy required for sale of service contract

42-11-102. Reimbursement policy required for sale of service contract. A motor vehicle service contract shall not be issued, made, provided, sold, or offered for sale in this state unless the provider of the service contract is insured under a motor vehicle service contract reimbursement insurance policy issued by an insurer or administrator authorized to do business in this state.

C.R.S. § 42-11-103 Reimbursement policy - required provisions

42-11-103. Reimbursement policy - required provisions. A motor vehicle service contract reimbursement insurance policy shall not be issued, made, provided, sold, or offered for sale in this state unless the reimbursement insurance policy conspicuously states that the issuer of the policy shall pay on behalf of the provider all sums which the provider is legally obligated to pay for failure to perform according to the provider's contractual obligations under the motor vehicle service contracts issued or sold by the provider.

C.R.S. § 42-11-104 Service contract - required statements

42-11-104. Service contract - required statements. A motor vehicle service contract shall not be issued, made, provided, sold, or offered for sale in this state unless the contract conspicuously states that the obligations of the provider to the service contract holder are guaranteed under a service contract reimbursement policy, and unless the contract conspicuously states the name and address of the issuer of the reimbursement policy, the applicable policy number, and the means by which a service contract holder may file a claim under the policy.

C.R.S. § 42-11-105 Manufacturers' express warranties and service contracts excluded

42-11-105. Manufacturers' express warranties and service contracts excluded. This article does not apply to motor vehicle manufacturers' express warranties and service contracts as defined in section 42-10-101 (3). For purposes of this section, the term "manufacturer" includes the manufacturer or distributor of the covered vehicle or a subsidiary or affiliate of a manufacturer or distributor if fifty-one percent or more of the subsidiary or affiliate is owned directly or indirectly by the manufacturer, distributor, or common owner of fifty-one percent or more of the manufacturer or distributor.

C.R.S. § 42-11-106 Deceptive trade practices prohibited

42-11-106. Deceptive trade practices prohibited. Failure to comply with the provisions of this article in the course of a business, vocation, or occupation is a deceptive trade practice and is subject to the provisions of the "Colorado Consumer Protection Act", article 1 of title 6, C.R.S.

C.R.S. § 42-11-107 Enforcement

42-11-107. Enforcement. The attorney general and the district attorneys of the judicial districts of the state are concurrently responsible for the enforcement of this article.

C.R.S. § 42-11-108 Remedies

42-11-108. Remedies. The provisions of this article shall be available to any service contract holder in a civil action for any claim against a motor vehicle service contract provider. The court shall award reasonable attorney fees and costs to a prevailing party in any civil action brought to enforce the provisions of this article.

C.R.S. § 42-11-109 Maintenance agreement excluded

42-11-109. Maintenance agreement excluded. A prepaid agreement that provides only routine maintenance is not a service contract nor a contract of insurance.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://leg.colorado.gov/sites/default/files/images/olls/crs2024-title-42.docxFetched: 10/6/2026