Key Takeaways
- CPCIGA protects Colorado policyholders when P&C insurers become insolvent
- CPCIGA covers claims up to $500,000 for most covered claims
- Workers' compensation claims are covered without a cap
- CPCIGA does not cover surplus lines policies or self-insured plans
- Producers cannot advertise or use CPCIGA coverage as a selling point
Last updated: January 2026
Colorado Property and Casualty Insurance Guaranty Association (CPCIGA)
The Colorado Property and Casualty Insurance Guaranty Association (CPCIGA) protects Colorado residents when P&C insurance companies become insolvent.
Purpose and Function
CPCIGA:
- Protects policyholders of insolvent P&C insurers
- Pays covered claims up to statutory limits
- Funded by assessments on member insurers
- Operates under state law supervision
How It Works
When a P&C insurer becomes insolvent:
- DOI takes action - Places insurer in liquidation
- CPCIGA activates - Takes responsibility for covered policies
- Claims processed - CPCIGA pays covered claims
- Assessments made - Member insurers pay assessments
Coverage Limits
CPCIGA provides coverage up to specific limits:
Claim Limits
| Coverage Type | Maximum |
|---|---|
| Most Covered Claims | $500,000 per claim |
| Workers' Compensation | No cap |
| Homeowners Claims | $500,000 |
| Auto Claims | $500,000 |
| Commercial Claims | $500,000 |
Important Notes
- $500,000 maximum per claimant for most claims
- Workers' comp has no aggregate limit
- Net worth deductions may apply to commercial claims
- Certain deductibles may apply
What Is Covered
CPCIGA covers claims under:
Covered Policies
- Homeowners insurance
- Auto insurance
- Commercial property
- Commercial liability
- Workers' compensation
- Personal liability
What's NOT Covered
| Not Covered | Reason |
|---|---|
| Surplus lines policies | Non-admitted insurers |
| Self-insured plans | Not insurance policies |
| Title insurance | Separate guaranty fund |
| Ocean marine insurance | Separate coverage |
| Amounts above limits | Statutory limit applies |
| Return of unearned premium | Not a claim (limited exceptions) |
Funding
CPCIGA is funded by assessments on member insurers:
Assessment Process
- Member insurers pay assessments when needed
- Based on premium volume in Colorado
- May be recouped through rate adjustments
- Separate accounts for different coverage types
Assessment Accounts
| Account | Purpose |
|---|---|
| Workers' Comp Account | WC claims only |
| Auto Account | Auto claims |
| All Other Account | All other P&C claims |
Producer Restrictions
Advertising Prohibition
Producers cannot:
- Use CPCIGA coverage as a selling point
- Advertise guaranty association protection
- Imply policies are "guaranteed" by CPCIGA
- Compare CPCIGA to FDIC or SIPC
- Suggest choosing insurer based on CPCIGA
Required Conduct
- Provide accurate information if asked directly
- Cannot misrepresent coverage limits
- Cannot suggest coverage exceeds actual limits
- Must not use to induce sales
Exam Tip: Remember that producers CANNOT use CPCIGA coverage as a selling point. This is a frequently tested rule.
Claims Process
When an insurer becomes insolvent:
- Notice sent - CPCIGA notifies policyholders
- Claims submitted - To CPCIGA directly
- Claims evaluated - Within statutory limits
- Benefits paid - If claim is covered
- Policy may end - Policyholder finds new coverage
Timeframes
- CPCIGA handles claims during liquidation
- Process can take time
- Priority given to workers' comp claims
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Test Your Knowledge
What is the maximum coverage CPCIGA provides for most P&C claims?
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Test Your Knowledge
Can a Colorado P&C producer use CPCIGA coverage as a selling point?
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B
C
D
Test Your Knowledge
Which type of claim does CPCIGA cover without a dollar cap?
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B
C
D
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