Colorado’s second-highest court concluded on Thursday that an insurance company violated state law when it refused to disclose an automobile policy to an injured motorist for nearly one year after she requested it.

By 2-1, a three-judge Court of Appeals panel held that Esurance Property & Casualty Insurance Company had an obligation to hand over its insurance policy for the driver who injured plaintiff Reesa Bohanan, even though the policy was not in effect at the time of the crash.

Judge Timothy J. Schutz, in the Feb. 5 majority opinion, wrote that state law requires disclosure of any policy that “is or may be relevant” to a liability claim. In Bohanan’s case, there was an open question after the crash about whether the at-fault driver’s policy was active.

“While Esurance ultimately denied coverage, both the amount of time it took to assess the coverage issue and the initial confusion on both sides as to whether the loss could or would be covered make clear that during the statutory response period the policy ‘(was) or may (have been) relevant to the claim’,” Schutz wrote for himself and Judge Matthew D. Grove.

Judge Jerry N. Jones dissented, arguing that a policy that is not in effect is not one that “may be relevant” to an insurance claim.

“To hold otherwise, as the majority does, imposes virtually boundless obligations on insurance companies to disclose policies that have no conceivable possibility of providing coverage,” he wrote.

In 2019, Colorado lawmakers enacted a measure to help motorists determine which insurance coverage is available in the event of an injury. To facilitate “accurate and reliable information,” the law mandates that auto insurance companies disclose policies within 30 days of a request from a claimant, so long as the policy is or may be relevant to the claim. There is a $100-per-day penalty for companies that withhold information beyond the deadline.

On Aug. 31, 2022, a driver crashed into Bohanan and injured her. She hired an attorney, who requested the at-fault driver’s insurance policy from Esurance one week later.

Someone else had purchased the policy on behalf of the at-fault driver within hours of the accident, and it was not immediately clear whether the policy applied to the crash. On Oct. 13, Esurance informed Bohanan’s attorney that it had confirmed the policy came into effect “after the time of the loss.”

Ten months later, Bohanan sent another letter to Esurance about its noncompliance with the 2019 law. On Sept. 29, 2023, Esurance provided the at-fault driver’s policy for the first time.

Days later, Bohanan filed suit, alleging Esurance owed her penalties for its delayed disclosure.

Denver District Court Judge Kandace C. Gerdes acknowledged that there were no appellate decisions interpreting the 2019 law or addressing whether disclosure was required for policies not in effect at the time of an injury. But she explained the legislature intended to provide transparency, and Esurance’s position would allow insurers to unilaterally determine whether disclosure is warranted.

“Even if the policy ultimately is irrelevant, that is a secondary consideration to the issue of disclosing such a policy,” she wrote. “As the General Assembly stated, citizens should be protected, and unnecessary litigation should be prevented.”

Gerdes later determined that Esurance owed only $600 in penalties, measured from the end of the 30-day window until the date when Esurance told Bohanan that the at-fault driver’s policy took effect after the accident.

Both sides appealed.

“Simply put, Esurance was required to disclose the policy to Ms. Bohanan by October 7, 2022, but it did not do that until September 29, 2023, so it was not until that day that Esurance finally complied with its statutory obligation,” wrote attorney Sarah A. Schrieber in contesting the penalty amount on behalf of Bohanan.

“By the plain language of the statute, the legislature did not create a requirement for insurance companies to disclose prior or subsequent policies,” wrote attorney Daniel J. Bristol, disputing Esurance’s liability under the law.

The appellate panel’s majority sided with Bohanan on both counts. As for whether Esurance violated the disclosure law, Schutz agreed with Gerdes that lawmakers did not intend for insurers to reject a request for a policy and decide for themselves that no coverage is available.

“Esurance’s proposed interpretation would allow insurers to deny — or, at best, delay — the production of potentially relevant policy information and sow doubt rather than promote clarity,” he wrote. “It would also perpetuate uncertainty and misunderstanding, which are the fertile breeding grounds of litigation. Such outcomes are directly at odds with the General Assembly’s stated purposes.”

Further, the penalties accumulated until Esurance produced the policy 356 days later. Therefore, it owed $35,600 in penalties.

Jones, in dissent, wrote that the law “could stand some clarification by the General Assembly.” But he did not believe lawmakers intended to trigger additional litigation surrounding insurance policies that do not apply to the underlying injured-motorist dispute.

“All that’s necessary to impose liability under the statute, in the majority’s view, is a request to which the insurer doesn’t respond and the existence of a policy that at any point in time may have covered the insured,” he wrote. “I don’t think that’s what the General Assembly had in mind.”

The case is Bohanan v. Esurance Property & Casualty Insurance Company.