In any action against an unauthorized foreign or alien insurer upon a contract of insurance issued or delivered in this state to a resident thereof or to a corporation authorized to do business therein, if the insurer has failed for thirty days after demand prior to the commencement of the action to make payment in accordance with the terms of the contract, and it appears to the court that such refusal was vexatious and without reasonable cause, the court may allow to the plaintiff a reasonable attorney fee and include such fee in any judgment that may be rendered in such action. Such fee shall not exceed twelve and one-half percent of the amount which the court or jury finds the plaintiff is entitled to recover against the insurer, but in no event shall such fee be less than twenty-five dollars. Failure of an insurer to defend any such action is deemed prima facie evidence that its failure to make payment was vexatious and without reasonable cause.
Source: L. 55: p. 478, § 4. CRS 53: § 72-19-4. C.R.S. 1963: § 72-18-4.
ANNOTATION
For section to apply, policy must be issued or delivered in Colorado. Despite the fact that defendant, an out of state insurance company, was not authorized to do business in Colorado at the time this suit was commenced, it is clear that this statute does not apply where the policy was neither issued nor delivered in this state. Iowa State Travelers Mut. Assurance Co. v. Brown, 29 Colo. App. 458, 485 P.2d 910 (1971).