Why Insurance Companies May Lose Their VIP Status in Criminal Courts

What This Bill Actually Does

To understand what House Bill 26-1017 does, you first have to look at how criminal courts handle money right now. When someone is convicted of a crime—say, stealing a car or vandalizing a storefront—the judge typically orders them to pay restitution. This is money meant to make the victims whole. Under current Colorado law (C.R.S. 18-1.3-602), the definition of a "victim" includes insurance companies. If your insurance cuts you a check to fix the damages, the court effectively acts as a collection agency for the insurer, ordering the criminal to pay the insurance company back as part of their sentence.

This bill completely upends that system. It explicitly strips insurers from the statutory definition of a "victim" in the criminal restitution process. The legislation states that the term "victim" will no longer include "an insurer who has suffered a loss because of a contractual relationship with the victim." In plain English: if an insurance company cuts a check to a policyholder because of a crime, the district attorney and the criminal court judge are no longer going to help the insurance company get that money back from the offender.

However, the bill doesn't leave insurers entirely without options. A specific provision clarifies that insurers still have the right to file a civil action against the offender to recover their losses. But instead of piggybacking on a state-funded criminal prosecution, the insurance company will now have to hire its own lawyers, pay court filing fees, and navigate the civil justice system independently. It separates the criminal punishment from the corporate debt collection.

What It Means for You

If you are a Colorado resident—especially a homeowner or someone who relies on personal property insurance—this bill changes the mechanics of what happens after you are the victim of a crime. Right now, criminal restitution hearings can get incredibly bogged down while lawyers argue over massive insurance payouts and subrogation claims. By removing the insurance companies from the room, the criminal court will focus exclusively on your direct, out-of-pocket losses. That means the judge will only be looking at your deductible, any stolen items that weren't covered by your policy, or your immediate medical co-pays. It could make the court process move much faster for you.

But here is the indirect consequence you need to watch: your wallet might still take a hit. If insurance companies are locked out of the criminal restitution process, they are going to recover a lot less money. Suing a convicted criminal in civil court is incredibly expensive, and let's be honest—most offenders don't have the assets to pay a civil judgment anyway. If insurers start writing off these payouts as total, unrecoverable losses, there is a very real possibility they will try to balance their books by raising insurance premiums across the board. You might end up paying slightly more every month to cover the money insurers can no longer claw back from criminals.

Here is what you should do right now to prepare for this shift:

• Check your deductible: If you are relying on criminal courts to make you whole after a crime, remember they will soon only look at your out-of-pocket costs. Make sure your deductible is an amount you can actually afford to lose in the short term.
• Keep meticulous receipts: If you are a victim of a crime, document exactly what your insurance didn't cover. That will be the only money the DA can fight for on your behalf.
• Contact your state representative: Tell them whether you think criminal courts should focus solely on direct human victims, or if you are worried about potential premium hikes resulting from this change.

What It Means for Your Business

For standard brick-and-mortar business owners—retailers, restaurant operators, property managers, and general contractors—this bill means your commercial insurance carrier is going to be on an island if your business is targeted by crime. Say someone breaks into your job site and steals $50,000 worth of lumber. Your builder's risk policy pays you, which is great. But previously, the local DA would fight to get that $50k back from the thief to reimburse your insurer. Now, your insurer has to eat that loss unless they want to fund a separate civil lawsuit. As a business owner, you need to anticipate that commercial property and casualty insurers will adjust their risk models to account for this lost revenue stream.

If you operate in the insurance, legal, or subrogation sectors, this is a massive operational disruption. According to state data, there are about 600 criminal cases every year where restitution is ordered specifically for an insurance company. Your legal department is going to have to evaluate every single one of those future cases to decide if it is worth the civil filing fees and attorney hours to pursue a civil judgment. In cases of petty theft or minor vandalism, the return on investment simply won't be there. You will need to pivot your recovery strategies entirely.

If you own a business in Colorado, here are the steps you should take this week to get ahead of this legislation:

• Audit your recent claims: Review any property damage, theft, or fleet vehicle claims from the last two years to see how many of them relied on criminal restitution. This will give you an idea of how much money your carrier was recovering.
• Call your commercial broker: Ask them directly how the passage of HB26-1017 will impact your commercial property premiums during your next renewal cycle.
• Consult your legal team: If you are an insurer or a business that self-insures through a captive model, have your general counsel immediately draft a cost-benefit matrix for pursuing civil judgments against criminal offenders.

Follow the Money

According to the nonpartisan fiscal note attached to the bill, the direct financial impact on the state budget is going to be incredibly minimal. We are talking about roughly 600 cases annually where restitution involves an insurance company. By stripping these complex corporate claims out of criminal court, the Judicial Department actually saves a bit of administrative workload. Probation officers and court clerks will no longer have to process, track, and distribute those specific restitution payments, freeing them up to focus on direct victim payouts.

On the revenue side, the state might see a tiny bump in civil filing fee revenue if insurers decide to sue offenders in civil court. However, state analysts expect this to be a wash. Insurers are smart with their money; they aren't going to pay civil filing fees to sue an incarcerated offender who has zero assets to satisfy a judgment. The real financial weight of this bill doesn't fall on local governments or taxpayers—it falls squarely on the private insurance market, shifting the burden of recovery entirely onto their balance sheets.

Where This Bill Stands

Introduced on January 14, 2026, HB26-1017 is moving smoothly and quietly through the legislature. It cleared the House Committee on Judiciary without a single amendment on February 3. As of February 6, it is sitting on second reading in the House, getting laid over daily. In legislative terms, being "laid over daily" usually just means leadership is managing floor time and calendar space before bringing it up for a final voice vote.

Sponsored by Reps. Cecelia Espenoza and Yara Zokaie in the House, and Sen. Mike Weissman in the Senate, this bill has the backing of key Judiciary leaders. Because it doesn't require any new state funding or messy administrative overhaul, its trajectory looks very solid. Expect it to clear the House floor soon and head over to the Senate. If passed, the new rules will take effect at 12:01 a.m. on August 12, 2026.