Colorado Travel Insurance Regulations Take Effect | Insurify

Colorado residents may find their summer vacations a bit more relaxing this year. The state's new regulations for travel insurance take effect Aug. 7.

The Travel Insurance Model Act, signed into law by Gov. Jared Polis in April, applies to travel insurance that covers Colorado residents and any travel insurance company doing business in the state. The act implements multiple consumer protections, including a refund requirement, prohibition of opt-out tactics, and disclosure requirements for policy exclusions.

New regulations

Colorado's legislation largely follows a travel insurance model proposed by the National Association of Insurance Commissioners (NAIC). The act defines travel insurance as coverage for personal, planned travel that covers:

Interruption or cancellation of a tripLost baggage or personal effectsDamage to accommodations or rental vehiclesHealth coverage for illness, accident, disability, or death while travelingEmergency evacuationReturn of a traveler's remains to their home country

Under the new legislation, travel insurance companies must disclose if a policy excludes a pre-existing health condition, and use forms, policies, certificates of insurance, and other documentation that follow the legislation's requirements. Insurers must also provide full refunds for canceled policies, as long as the covered trip hasn't begun and the policyholder hasn't filed a claim.

Travel insurers can no longer market blanket travel insurance coverage as free and can't require travelers to deselect coverage in order to opt out of buying it.

How travel insurance works

Generally, several types of travel insurance are available: travel (or trip) cancellation, travel medical and major medical insurance, emergency medical evacuation/repatriation coverage, accidental death and dismemberment, baggage loss, and cancel-for-any-reason (CFAR) policies, according to the NAIC.

But many travel insurance policies have specific exclusions that consumers might not realize. For example, policies often exclude trip cancellations or interruptions that occur due to a foreseeable or expected event. That exclusion meant many people who had to cancel trips because they caught COVID-19 during the pandemic had their travel insurance claims denied.

What's next?

The new legislation also sets ground rules for who can sell travel insurance, the type of licensing they must have, and penalties for travel insurance producers who violate the law. Regulations take effect on Aug. 7.

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