Colorado § 5-9.3-103 - Guaranteed asset protection agreement requirements - application.

§ 5-9.3-103. Guaranteed asset protection agreement requirements - application.

(1) A creditor may offer, sell, provide, or administer a guaranteed asset protection agreement in connection with a consumer finance agreement only if the creditor and the guaranteed asset protection agreement comply fully with this article 9.3 and meet all of the following conditions:

(a) The creditor provides to the consumer a written notice, in bold-face type, that specifies the following:

(I) That the consumer is not required to purchase a GAP agreement in order to obtain the credit or any particular or favorable credit terms;

(II) The amount of the GAP fee;

(III) That the consumer may wish to consult an insurance agent to determine whether similar coverage may be obtained through an insurance product and at what cost;

(IV) That the GAP agreement benefits may decrease over the term of the finance agreement;

(V) That the consumer may cancel the GAP agreement for any or no reason within thirty days after the effective date of the GAP agreement, and that the consumer will receive a full refund of the GAP fee so long as no loss or event covered by the GAP agreement has occurred; and

(VI) That the GAP agreement is not a substitute for collision or property damage insurance;

(b) (I) The creditor provides the consumer with a cancellation method that is conspicuously displayed in the GAP agreement or in a separate, written cancellation form and that includes:

(A) The name, mailing address, email address, or phone number that may be used to cancel the GAP agreement;

(B) A statement that the consumer may cancel the GAP agreement for any or no reason within thirty days after the effective date of the GAP agreement, and that the consumer will receive a full refund of the GAP fee so long as no loss or event covered by the GAP agreement has occurred; and

(C) A statement that the consumer must complete and return the cancellation form or send other written notice of cancellation to the mailing address or email address that the creditor provides or call the phone number listed in order to cancel the GAP agreement;

(II) If a creditor wants to provide an alternative cancellation method other than the one described in subsection (1)(b)(I) of this section, the creditor must clearly and conspicuously state the alternative method and instructions on how to cancel the GAP agreement in the finance agreement;

(c) The consumer provides to the creditor an affirmative, written authorization for the purchase of the GAP agreement; and

(d) The creditor delivers to the consumer, in writing, the GAP agreement, which must include:

(I) A written description of the GAP agreement's benefits, terms, conditions, and exclusions;

(II) A statement that discloses any limitation in coverage under the GAP agreement; and

(III) The procedure and timing to be followed in order to submit a claim after a total loss.

Source: L. 2023: Entire article added, (HB 23-1181), ch. 425, p. 2499, § 3, effective January 1, 2024.