CO Code § 42-7-413 (2021)
2021 Colorado Code|Title 42 - Vehicles and Traffic|Article 7 - Motor Vehicle Financial Responsibility Law|Part 4 - Proof of Financial Responsibility - Judgments and Convictions|§ 42-7-413. Motor Vehicle Liability Policy

  “Motor vehicle liability policy”, as used in this article, means a policy of liability insurance issued by an insurance carrier authorized to transact business in this state to or for the benefit of the person named therein as insured, which policy shall meet the following requirements:   The policy of liability insurance shall designate by explicit description or by appropriate reference all motor vehicles with respect to which coverage is thereby intended to be granted.    The policy of liability insurance shall insure the person named therein and any other person using or responsible for the use of said motor vehicle with the express or implied permission of said insured.    The policy of liability insurance shall insure every such person on account of the maintenance, use, or operation of the motor vehicle within the continental limits of the United States or Canada against loss from the liability imposed by law; for damages, including damages for care and loss of services arising from such maintenance, use, or operation to the extent and aggregate amount, exclusive of interest and costs, with respect to each such motor vehicle, in the amounts specified in section 42-7-103 (2).       When an operator's policy of liability insurance is required, it shall insure the person named therein as insured against the liability imposed by law upon the insured for bodily injury to or death of any person or damage to property to the amounts and limits set forth in paragraph (c) of subsection (1) of this section and growing out of the use or operation by the insured within the continental limits of the United States or Canada of any motor vehicle not owned by the insured.    Any liability policy issued under this section need not cover any liability of the insured assumed by or imposed upon said insured under any workers' compensation law nor any liability for damage to property in charge of the insured or the insured's employees.    Any such policy of liability insurance may grant any lawful coverage in excess of or in addition to the coverage specified in this section or contain any agreements, provisions, or stipulations not in conflict with the provisions of this article and not otherwise contrary to law.    Any motor vehicle liability policy which by endorsement contains the provisions required under this section shall be sufficient proof of ability to respond in damages.    The department may accept several policies of one or more such carriers which together meet the requirements of this section.    Any binder pending the issuance of any policy of liability insurance, which binder contains or by reference includes the provisions under this section, shall be sufficient proof of ability to respond in damages.     History. Source: L. 94: Entire title amended with relocations, p. 2484, § 1, effective January 1, 1995.    ANNOTATION   Law reviews. For comment on Am. Serv. Mut. Ins. Co. v. Parviz, appearing below, see 37 U. Colo. L. Rev. 138 . For comment on Am. Bus Lines v. Am. Sur. Co., appearing below, see 43 Den. L.J. 238 (1966). For article, “Kohl v. Union Insurance Company: Interpretation and Application of the ‘Arising Out of the Use Clause'”, see 65 Den. U. L. Rev. 77 (1988). For article, “Recovery of Interest: Part II — Other Than Personal Injury”, see 18 Colo. Law. 1307 (1989).   Annotator's note. Since this section is similar to repealed § 13-7-22 , CRS 53, CSA, C. 16, § 56, and laws antecedent to CSA, C. 16, § 56, relevant cases construing these provisions have been included in the annotations to this section.   “Use” of motor vehicle was causally related to the accidental discharge of rifle where accident occurred while insured was preparing to unload rifle and safely store it for the journey home. Kohl v. Union Ins. Co., 731 P.2d 134 (Colo. 1986).   This section applies only to policies issued by an insurance carrier authorized to transact business in this state and to insurance policies issued in this state by companies organized under the insurance laws. Am. Serv. Mut. Ins. Co. v. Parviz, 153 Colo. 490 , 386 P.2d 982 (1963).   Applicability of section limited. This section applies only after a driver has submitted a policy to the commissioner of insurance as proof of his financial responsibility. Price v. Sommermeyer, 41 Colo. App. 147, 584 P.2d 1220 (1978), aff'd, 198 Colo. 548 , 603 P.2d 135 (1979).   A policy of automobile liability insurance is a contract and is construed in general accordance with the rules for construction of contracts. Waggoner v. Wilson, 31 Colo. App. 518, 507 P.2d 482 (1972).   The requirements of this section become a part of an insurance contract to which it is applicable. Universal Indem. Ins. Co. v. Tenery, 96 Colo. 10 , 39 P.2d 776 (1934); Traders Gen. Ins. Co. v. Pioneer Mut. Comp. Co., 127 Colo. 516 , 258 P.2d 776 (1953).   Ownership of vehicle and payment of insurance premium do not constitute use of or responsibility for a vehicle for the purposes of coverage. An insurance carrier is not obliged to cover a person who owns a vehicle or pays the insurance premiums when such person is not a named insured. Mid-Century Ins. Co. v. Heritage Drug, Ltd., 3 P.3d 461 (Colo. App. 1999).   Subsection (1)(b) of this section requires that a permission clause be included in all liability policies. Am. Bus Lines v. Am. Sur. Co., 238 F. Supp. 589 (D. Colo. 1965 ).   An omnibus clause is neither required by subsection (1)(c) nor may it be implied by law. United States Fire Ins. Co. v. Goldstein Transp., 30 Colo. App. 478, 496 P.2d 1079 (1972).   Representations, as distinguished from warranties, need not be attached to the automobile liability insurance contract in order for the insurer to rely upon the same. Safeco Ins. Co. of Am. v. Gonacha, 142 Colo. 170 , 350 P.2d 189 (1960).   False representations material to risk are grounds to void policy. Where representations made in an application for automobile liability insurance are false and material to the risk and relied upon by the insurer in issuing the policy, the necessary grounds to void the policy are met. Safeco Ins. Co. of Am. v. Gonacha, 142 Colo. 170 , 350 P.2d 189 (1960).   The purpose of a nonownership clause is to provide the insured with coverage while the insured is engaged in the occasional or infrequent use of an automobile other than the one specified in the policy, but not to provide liability coverage in regard to unspecified automobiles which are furnished or available for the insured's frequent or regular use. Waggoner v. Wilson, 31 Colo. App. 518, 507 P.2d 482 (1972).   Permittee retaining full right or power of control may turn over operation to another. Where a named insured grants to another “actual use” of his automobile, there is no violation of that permission where the permittee turns over the mechanical operation of the automobile to another, but remains in the car with full right or power of control over its use. Berthrong v. Certified Indem. Co., 31 Colo. App. 81, 497 P.2d 1273 (1972).   Person accompanied by permittee is covered by omnibus clause. Where plaintiff was involved in an automobile accident while driving a car with the permission and in the company of one to whom unlimited and unrestricted use has been given by the insured owner, he came within the coverage of an omnibus clause in the owner's policy as an additional insured. Berthrong v. Certified Indem. Co., 31 Colo. App. 81, 497 P.2d 1273 (1972).   General permission does not convey permittee authority to allow another independent use. The general permission given by a named insured to another to use an automobile does not convey authority to the permittee to allow a second person independent use of the automobile and, where a permittee is using an automobile beyond the scope of the permission given him, he will not be held to be an additional insured under the omnibus clause of an automobile liability policy. Berthrong v. Certified Indem. Co., 31 Colo. App. 81, 497 P.2d 1273 (1972).   Effect of negligence of renter of automobile. See Universal Indem. Ins. Co. v. Tenery, 96 Colo. 10 , 39 P.2d 776 (1934).   Accident must arise under circumstances reasonably contemplated. To be within the coverage afforded by an automobile insurance clause, the accident must arise under circumstances which could be reasonably contemplated by the parties when they entered the agreement. Beeson v. State Auto. Cas. Underwriters, 32 Colo. App. 62, 508 P.2d 402, aff'd, 183 Colo. 284 , 516 P.2d 623 (1973).   Gunshot injuries sustained during a traffic altercation were “caused by accident” and, therefore, subject to uninsured motorist coverage. State Farm Mut. Auto. Ins. Co. v. McMillan, 925 P.2d 785 (Colo. 1996).   Phrase “caused by accident” was ambiguous, and must be construed against the drafter of the insurance policy. State Farm Mut. Auto. Ins. Co. v. McMillan, 925 P.2d 785 (Colo. 1996).