The Colorado Supreme Court released a decision in Travelers Prop. Cas. Co. v. Stresscon Co. this week (April 25) limiting the so-called notice-prejudice rule in Colorado. While the exact legal implications resulting from the decision will not be seen for many years as courts interpret the decision, the decision is likely to impact how insurers handle claims almost immediately.

But how exactly will this decision effect Coloradans?

When you purchase an insurance policy, your insurance company will provide you with a copy of the policy, laying out all of the details of what you have to do to get coverage. Now, keep in mind, these policies are typically dozens of tiny-printed-pages long and are usually written in such a way that you’d need a decoder ring in order to fully comprehend exactly what your end of the bargain entails. And, surprise, what you have to do is always more than just pay for the coverage.

Now imagine the worst happens, you actually need to use the insurance that you’ve paid for every month. Do you remember every little detail of your policy? According to the decision, you better.

The decision states: “whether the insured acts out of ignorance of the coverage or by design….” This phrase should terrify you. What this statement is basically allowing for is, going forward, insurance companies can try to get out of paying claims when the policy-holders don’t comply with the exact requirements of the insurance policy, even if the insured does one tiny thing forbidden by the policy that they never knew about (because they didn’t read, understand, and remember every aspect of their policy).

As if that wasn’t bad enough, the other frightening aspect of this decision is that the Colorado Supreme Court did not care whether the insurance company had not been hurt in any way by the policy holder failing to comply with the exact provisions of the policy. What these two things together mean is that insurance companies have an excuse to deny coverage because someone makes a little mistake without realizing it, even if the error didn’t hurt the insurance company at all. Is it Right? No. Should they? No. Will they? We will see.

Insurance policies are confusing and insurance companies are difficult, you don’t need decisions like this one make the process even more complicated. That is why it is so important to have a lawyer on your side dealing with the insurance company early in the process, instead of trying to do it yourself and waiting until you realize they are not on your side—they are on their own side.