Opinion ID: 168886
Heading Depth: 2
Heading Rank: 2

Heading: Sufficiency of offer

Text: 31 Hill argues the initial offer of insurance, particularly extended PIP benefits, was inadequate because Pitcher failed to explain it fully and the surrounding documentation contained misstatements and omissions of various items. He contends that the offers to renew the Paul insurance policy were similarly inadequate. 32 While § 710 states that an insurer shall offer enhanced PIP benefits to an insured, the statute does not define offer. In Brennan, the Colorado Court of Appeals stated that all that is required is that the insurer offer these extended benefits. Brennan, 961 P.2d at 554. In Fazio v. State Farm Mut. Auto. Ins. Co., 55 P.3d 229, 231 (Colo.Ct.App.2002), the court stated that [t]he plain meaning of this language is that a named insured who has minimum PIP coverage under § 10-4-706 must be offered an opportunity to purchase certain types of enhanced PIP coverage. In an unpublished decision, our court, in determining whether the insurer had fulfilled its duty to offer optional extended PIP coverage under § 710, applied the test set out by the Colorado Supreme Court in Allstate Ins. Co. v. Parfrey, 830 P.2d 905, 913 (Colo.1992). Johnson v. State Farm Mut. Auto. Ins. Co., 158 Fed.Appx. 119 (10th Cir.2005) (unpublished). Parfrey involved the requirement imposed on insurance companies by Colo.Rev.Stat. § 10-4-609(b)(2) to offer higher than the statutory minimum in uninsured or underinsured motorist coverage. We do not rely on unpublished decisions as authoritative precedent. However, we take this opportunity to adopt and publish the following language, as well as language quoted, infra, from an unpublished decision. In analyzing the nature and scope of an insurer's duty the Colorado Supreme Court determined that the insurer must perform its duty of notification `in a manner reasonably calculated to permit the [insured] to make an informed decision on whether to purchase ... coverage higher than the minimum statutory liability limits.' Johnson, 158 Fed.Appx. at 121 (quoting Parfrey, 830 P.2d at 913). Parfrey elaborated on the proper test for determining whether an insurer has performed its duty to notify: 33 In determining whether an insurer has fulfilled its statutory duty, a court may appropriately consider such factors as the clarity with which the purpose of ... coverage was explained to the insured, whether the explanation was made orally or in writing, the specificity of the options made known to the insured, the price at which the different levels of ... coverage would be purchased, and any other circumstances bearing on the adequacy and clarity of the notification and offer. 34 Parfrey, 830 P.2d at 913. In the final analysis, the sufficiency of the offer must be resolved under the totality of the circumstances. Id. at 914. Both parties here advocate application of the Parfrey totality of the circumstances test. 8 35 Whether we apply the specific factors set out in Parfrey or simply look at the totality of the circumstances, we conclude that Allstate's offer of extended PIP benefits to Paul was adequate and enabled the Pauls to make an informed decision about whether to purchase extended coverage. Initially, Paul had a face-to-face meeting with Pitcher, in which she testified she explained the various coverages, showed Paul the options for extended PIP coverage on her computer screen and went over the PIP Disclosure Form. In Johnson, we held that a face-to-face meeting in which the agent explained the extended PIP coverages, coupled with a brochure which provided a short explanation of and chart describing PIP coverages, constituted a sufficient offer under the No-Fault Act. We noted that: 36 the Parfrey analysis does not require an insurer to thoroughly address all of the conceivable situations in which enhanced PIP coverage might be desirable. Rather, the law merely required that the insured b[e] given enough information to advise the insured of the availability of coverage and permit a reasonably informed decision on whether to purchase it. 37 Johnson, 158 Fed.Appx. at 122. Here, Pitcher explained the PIP coverages and offered to quote Paul a price for extended PIP coverage. Paul declined the price quote. Pitcher also presented Paul with a written summary of the various PIP coverages in the Colorado PIP Disclosure Form. 38 Then, the policy which Allstate mailed to the Pauls contained an eight-page description of the extended PIP coverages available. Form X5188 accompanied the policy and it specifically stated that PIP coverage provided benefits for the named insureds, their passengers and pedestrians. This form was mailed to the Pauls on subsequent occasions as well. Additionally, Allstate mailed Form X67009 to the Pauls on several occasions, and it specifically stated that Allstate offered extended PIP benefits and provided an average price for such coverage. While Hill argues there were specific arguably ambiguous phrases and/or wordings in the various documents, it is impossible to conclude that, from all the above information, the Pauls were unable to make a reasonably informed decision not to purchase the extended PIP coverage.