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Colorado Insurance Fraud Laws

Colorado legislators have found insurance fraud to be an expensive drain on the state's businesses and residents. It comes in many different forms, but it often occurs when someone tries to make money in an insurance transaction through lies or misrepresentations. For example, submitting claims for items that weren't stolen or submitting workers' compensation claims for sports injuries. Insurance agents and providers can also violate insurance laws by, for example, embezzling insurance premiums or arbitrarily denying claims for things that should be covered.

Who Enforces Colorado Insurance Fraud Laws?

Insurance fraud can be punished in criminal court, civil court, or by administrative agencies in Colorado. The Colorado Attorney General's Insurance Fraud Unit and local district attorney's offices criminally investigate and prosecute insurance fraud crimes. The Colorado Department of Regulatory Agencies (DORA) Division on Insurance also reviews complaints and regulates insurance companies.

In addition, insurance fraud can be prosecuted at the federal level when it crosses state lines or involves other federal crimes, such as when mail fraud or racketeering are involved.

Colorado Insurance Fraud Laws: At A Glance

The following table outlines two of the main Colorado insurance fraud laws.


Colorado Revised Statutes Section 10-1-128 (Fraudulent Insurance Acts)

Colorado Revised Statutes Section 18-5-211 (Insurance Fraud)

What Is Prohibited?

Insurance consumers in Colorado are prohibited from doing any of the following with the intent to defraud:

  • Presenting an application for insurance with false information or which withhold relevant information
  • Presenting false claim for a loss or injury
  • Causing a vehicular accident to make a fraudulent insurance claim
  • Presenting a claim where the loss or damage claim existed before the insurance policy (unless permitted by policy)
  • Knowingly presenting false written, oral, or electronic statements for an insurance claim

Insurance agents can also get in trouble for insurance fraud by intentionally misappropriating premium funds or presenting evidence of insurance containing false information to any person or entity.

What Is Required?

Insurance companies must promptly investigate claims, even if alleged to be fraudulent. They also must provide a clear fraud warning on all applications, policies, or claim forms and create and implement anti-fraud plans to accomplish the following:

  • Prevent insurance fraud (including by employees)
  • Educate employees about fraud detection
  • Hire or contract at least one fraud investigator
  • Report suspected or actual insurance fraud to the appropriate police or regulatory agency

Criminal Penalties

Insurance fraud is generally a Class 5 Felony punishable by up to 3 years in prison and $100,000 in fines. However, presenting false information on an application or renewal is only a Class 1 Misdemeanor punishable by up to 18 months in jail and $5,000 in fines.

Administrative Penalties

Insurance companies or agents who commit fraudulent insurance acts are subject to disciplinary action by the commissioner of insurance who can revoke business licenses.

Civil Penalties

A person or company who’s been wronged by a fraudulent insurance act could potentially sue in civil court to recover economic losses.

Note: State laws are always subject to change through the passage of new legislation, rulings in the higher courts (including federal decisions), ballot initiatives, and other means. While we strive to provide the most current information available, please consult an attorney or conduct your own legal research to verify the state law(s) you are researching.

Additional Resources For Colorado Insurance Fraud Laws

Get Professional Legal Help With Your Insurance Fraud Charges

If you've been accused of insurance fraud, whether as a claimant or as an insurance agent, you could be facing multiple state and federal charges. Don't wait until the last minute to make your case. Instead, reach out to a Colorado criminal defense attorney specializing in fraud cases to help you evaluate the evidence in your case and zealously advocate on your behalf. 

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