State RegulationsCO specificDifficulty 2/5
Under C.R.S. § 10-3-1105, which statement is correct when a Colorado Springs lender requires property insurance as a condition of a loan?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
C.R.S. § 10-3-1105 protects Colorado debtors: a lender may require insurance as a loan condition but may not require the borrower to obtain it from any particular insurer or agent, may not unreasonably disapprove a policy the borrower selects, and may not impose a separate handling charge for the required coverage.
Why the other options are wrong
- B) Requiring purchase from an affiliated agency is exactly the coercion of debtors that C.R.S. § 10-3-1105 forbids.
- C) Unreasonable disapproval of a policy the borrower selects is prohibited by C.R.S. § 10-3-1105.
- D) A separate handling charge for the required insurance is expressly barred by C.R.S. § 10-3-1105.
Memory hook
Lenders can demand insurance, not your insurance agent.