Progressive lost its bid to rewrite Colorado's uninsured motorist rules – and got hit with a six-figure bad faith verdict.
Colorado's highest court has refused to loosen the rules that limit when an uninsured motorist insurer can step into a fight over who caused a crash. The June 1, 2026 decision keeps carriers on a tight leash and reaffirms a precedent that has shaped UM claims handling for two decades.
It began with a collision. Andrew Ortiz, insured by Progressive, was turning left into a parking lot when his car collided with one driven by Tania Granados Camacho. Camacho was uninsured, driving on a learner's permit, with no adult in the car. Ortiz filed a UM claim. Progressive denied it, deciding he was more than 50% at fault.
Ortiz sued – Camacho for negligence, Progressive for breach of contract, bad faith, and unreasonable delay and denial of benefits. Camacho never responded, so the court entered a default against her, settling her liability because she did not contest it.
Then Progressive's strategy unraveled. Served with the default papers, the carrier did nothing. Its answer sidestepped the allegations against Camacho, treating them as directed only at Camacho and requiring no response from the carrier. Its defenses stayed vague – intervening causes, the acts of others, and a passing nod to Ortiz's own fault.
Ten months later, after the default and the close of discovery, Progressive said for the first time that it wanted to contest liability at the damages hearing. The district court refused to let it relitigate Camacho's fault but allowed it to challenge damages.
That ruling leaned on State Farm Mutual Automobile Insurance Co. v. Brekke, the 2004 decision at the heart of this appeal. Under Brekke, a UM insurer that wants into tort litigation between its insured and an uninsured driver must plead its legitimate defenses specifically and as soon as it reasonably can. The logic is a built-in conflict of interest: the court found that an insurer's participation in that fight sets its duty to its insured against its own financial stake, because shrinking the uninsured driver's liability also shrinks the carrier's bill.
The district court found Progressive had offered only generic, boilerplate defenses and never raised a liability concern when default was entered. So, it blocked the carrier from contesting Camacho's liability – but let it fully contest damages.
That paid off. After cross-examining Ortiz and his treating physician, Progressive helped cut the noneconomic and permanent impairment award to $20,000, just 20% of the $100,000 Ortiz sought. The total default judgment against Camacho was $86,958.66, which Progressive paid, resolving the contract claim.
The bad faith claims went to a jury – and that got costly. The jury awarded Ortiz $76,493.53 for unreasonable delay and denial of benefits and $140,000 for common law insurance bad faith.
Progressive appealed, saying it was wrongly shut out of the liability fight and that Brekke should be reconsidered. It argued the precedent quietly rewrote Colorado's civil procedure rules – Rule 8 on pleading basic defenses like comparative negligence, and Rule 9 on pleading fraud with particularity – and that any such change belonged with the Civil Rules Committee, not a footnote.
The Supreme Court disagreed. It declined to overrule Brekke, finding it neither originally wrong nor outdated. It added one clarification: Rule 9's heightened particularity standard applies only when a UM insurer raises fraud or mistake. Otherwise, the carrier need only plead its legitimate defenses specifically and promptly. Either way, generic boilerplate falls short.
The court affirmed and sent the case back to tally the appellate fees and costs Ortiz incurred – one more bill for Progressive.
For carriers, the takeaway is blunt: to claim a seat at the liability table in a UM case, claim it early and plead with specifics. Sit on a boilerplate answer, and you may pay out while your defense never gets heard.
