Colorado Property & Casualty Insurance License Exam — All Questions

What are Colorado's minimum auto liability limits for bodily injury (per person / per accident) and property damage?

• a.$10,000 / $20,000 / $10,000
• b.$25,000 / $50,000 / $15,000✓
• c.$100,000 / $300,000 / $50,000
• d.There is no minimum; auto liability coverage is optional

Under C.R.S. 10-4-620, Colorado's minimum auto liability limits are $25,000 per person and $50,000 per accident for bodily injury, plus $15,000 for property damage (written 25/50/15). Always verify current figures with the Colorado Division of Insurance.

For settling auto injury claims, Colorado follows which system?

• a.A tort ('at-fault') system in which the at-fault driver's liability coverage pays the other party✓
• b.A pure no-fault system in which each driver's own insurer always pays regardless of fault
• c.A system with no financial-responsibility requirement of any kind
• d.A federal single-payer auto injury system

Colorado is a tort ('at-fault') state. It operated a no-fault system in the past but repealed it in 2003 and returned to a tort/liability system. This determines how injury claims are paid in Colorado.

Under Colorado law, when an insurer cancels or does not renew a personal auto or homeowners policy, it must generally:

• a.Give no notice, because policies simply end at expiration
• b.Refund triple the premium as a statutory penalty
• c.Provide the policyholder advance written notice stating the reason, within the period fixed by state law✓
• d.Obtain the policyholder's written consent before it may nonrenew

Colorado regulates midterm cancellation and nonrenewal of personal-lines policies. Insurers must give advance written notice stating the reason within the number of days set by state law (shorter for nonpayment, longer for other reasons). Verify the exact notice periods with the Colorado Division of Insurance.

A property owner in Colorado needs coverage on a one-to-four-family dwelling that is rented to tenants (not owner-occupied). Which policy is typically appropriate?

• a.An HO-3 homeowners policy, which fits any dwelling
• b.A Dwelling (DP) policy, which is designed for rental or non-owner-occupied dwellings✓
• c.A personal auto policy endorsement
• d.A commercial crime policy

Homeowners (HO) forms require owner-occupancy. For a rental or non-owner-occupied dwelling, a Dwelling Property (DP) policy is the standard product in Colorado and nationwide. This national concept is applied to Colorado risks on the exam.