Opinion ID: 171219
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Heading: Colorado's Automobile Insurance Statutory Scheme

Text: In 1973, Colorado's legislature enacted the No Fault Act with the stated goal of avoid[ing] inadequate compensation to victims of automobile accidents. Colo. Rev.Stat. § 10-4-702. The Act provided that all Colorado automobile liability policies must include minimum PIP benefits. See Colo.Rev.Stat. § 10-4-706. More to the point, the No Fault Act mandated that insurers offer to their policyholders the option of purchasing enhanced PIP benefits. Id. § 10-4-710. While the minimum PIP benefits include time and dollar cut-offs, enhanced PIP benefits do not. [5] See Clark v. State Farm Mut. Auto. Ins. Co. ( Clark I ), 319 F.3d 1234, 1238 (10th Cir.2003) (noting that enhanced PIP benefits do not place time or dollar limitations on medical expense claims and offer the possibility of greater wage loss reimbursements). PIP benefits were payable to four classes of individuals: (1) the person named as the insured in the policy; (2) household relatives of the named insured; (3) permissive occupants of the insured vehicle; and (4) pedestrians injured in an accident involving the insured vehicle. Id. § 10-4-707. The Colorado courts eventually clarified the scope of the No Fault Act's mandate in a series of decisions, including Brennan v. Farmers Alliance Mutual Insurance Co., 961 P.2d 550 (Colo.Ct.App.1998). There, the Colorado Court of Appeals held that Colorado insurers were obligated to offer enhanced PIP coverage to people in all four of the § 10-4-707 categories, not just to the named insured. Id. at 554. These decisions triggered a slew of litigation: many policyholders who had not been offered enhanced coverage  and individuals in the other three § 10-4-707 categories  brought suit under the No Fault Act seeking reformation of their policies to provide benefits without the minimum PIP time and dollar cut-offs. See, e.g., Clark v. State Farm Mut. Auto. Ins. Co. ( Clark II ), 433 F.3d 703, 705 (10th Cir.2005). [6]