You expect your own insurance company to treat you fairly when you make a claim. You’ve diligently paid your premiums on time and expect to be able to use your insurance when you need it. That’s what you bought it for! However, many people unfortunately find that their own insurance companies don’t treat them fairly.
Dulin McQuinn Young can help protect your rights. Call us today for a free and confidential consultation.
How Can a Bad Faith Insurance Lawyer Help?
While many people have insurance, very few understand the ins and outs of their contracts with insurance companies. Insurance companies often try to take advantage of this disparity in knowledge, cheating out their own policyholders in the name of money.
Insurance companies only care about their profit margin. They rake in millions of dollars by receiving more in premiums than they pay out in claims. They may try to deny, delay, or inadequately defend claims to try to get out of paying what they owe.
An insurance bad faith lawyer fights to ensure that you are treated fairly by your insurance company. They can help by:
- Reviewing your insurance policy and evaluating how your insurance claim should have been handled
- Investigating your claim and gathering evidence of bad faith
- Handling communications with the insurance company
- Submitting a demand letter to the insurance company
- Negotiating for a favorable resolution on your behalf
- Filing a lawsuit, if necessary
At Dulin McQuinn Young, our Denver bad faith insurance lawyers have an in-depth understanding of how insurance companies operate. We can spot bad faith tactics and make legal claims against companies don’t do what they are legally required to. We can explain more about the legal process of holding insurance companies responsible when you call for a free case review.
What Is Bad Faith Insurance?
In insurance law, bad faith occurs when an insurance company doesn’t act in good faith and fair dealing with its insured. While insurance companies are not legally required to pay every claim that is submitted to them, they are expected to conduct a reasonable investigation and attempt to resolve claims in a fair manner.
Individuals take out insurance policies so that if they suffer a covered loss, they can receive payment for it. By virtue of paying insurance premiums, policyholders have a reasonable expectation that their insurance company will deal with them fairly in resolving claims. Insurance companies are legally obligated to do all of the following:
- Investigate the reported loss promptly
- Issue a timely decision on whether the insurance policy covers the reported loss
- Make payment within a reasonable time period if the claim is approved
When insurance companies engage in bad faith insurance practices, they violate their contractual obligations and undermine the trust and confidence that policyholders have in the insurance industry.
Common Examples of Insurance Bad Faith
Insurance bad faith can take many forms, including the following:
- Failing to acknowledge a claim
- Failing to conduct a reasonable investigation into a claim
- Causing undue delays in handling the claim
- Failing to communicate relevant information to the policyholder
- Failing to disclose policy limits
- Misrepresenting the insurance terms
- Not giving a reason for a denial
- Pointing to language in the insurance contract for the denial that does not exist
- Issuing a blanket denial of the claim
- Requiring unnecessary information or the same information over and over again
- Failing to respond to communications from the insured
- Conducting a superficial investigation into the claim
- Making undue delays in confirming or denying coverage
- Making unreasonable delays in processing a claim
- Denying a claim without conducting an investigation
- Denying valid claims without reasonable justification
- Failing to respond within applicable time limits
- Causing undue delays in denying or paying a claim
- Offering far less money to settle a claim than is fair
- Refusing to engage in settlement negotiations in good faith
- Failing to attempt to reach a fair settlement when liability is clear
It’s important to note that even if your insurance claim is denied or delayed, this does not necessarily mean that insurance adjusters are using bad faith tactics. An experienced Denver bad faith insurance attorney can carefully review your situation and explain if you have grounds for a bad faith claim.
Insurance Bad Faith and Indemnification
Insurance bad faith can also occur when an insurance company fails to indemnify an insured. Indemnification means that someone else defends a party. Insurance companies are obligated to defend lawsuits against the insured that are covered by the policy. For example, if you get in an auto accident, your liability insurance provider must defend you if you are sued.
Additionally, when agreeing to a settlement, the insurance company must consider the insured’s interests alongside its own. If it accepts a settlement and leaves the insured vulnerable, the insured may seek payment from the insurance company if a subsequent judgment is made against them.
Colorado’s Bad Faith Insurance Law
Bad faith insurance laws are generally based on state laws. In fact, Colorado’s insurance laws do not use the term “bad faith.” Instead, Colorado Revised Statutes § 10-3-1115 refers to the “improper denial of claims,” stating “A person engaged in the business of insurance shall not unreasonably delay or deny payment of a claim for benefits owed to or on behalf of any first-party claimant.” In essence, if your insurance provider did not have a “reasonable basis” for an adverse decision or action against you, you may have an insurance bad faith claim. However, what is considered a reasonable basis is subject to interpretation.
While this is the statutory provision regarding bad faith practices in Colorado, you could alternatively have a legal basis for a bad faith insurance case based on common law. Colorado courts have explained in previous cases that a common-law basis for a bad-faith insurance claim arises when the victim shows, by a preponderance of the evidence, that the insurance company unreasonably refused or delayed payment. The insurance company must have acted unreasonably or with a reckless disregard of the truth.
How to Determine You Have a Bad Faith Insurance Claim in Colorado
Determining whether you have a bad faith insurance claim in Colorado depends on whether you are filing your case under the statute or based on common law. For the statutory provision, you must show the following:
- The insurance company unreasonably delayed or denied payment of a claim for you.
- The insurance company did not have a reasonable basis to do so.
For the common law bad faith case, you must be able to show the following:
- The insurance company unreasonably refused or delayed payment.
- The insurance company acted unreasonably or with a reckless disregard for the truth.
The primary difference between these two types of cases is that the common law action requires showing the insurance company had an intentional or reckless disregard for the rights of the insured, while the statutory law only requires showing an unreasonable denial of benefits. An experienced attorney can evaluate your situation, determine which legal theory applies, and work to obtain evidence to prove your case.
What Types of Insurance Policies Can Bad Faith Claims Apply to in Colorado?
Bad faith practices can apply to various types of insurance policies, including the following:
- Auto insurance
- Health insurance
- Disability insurance
- Life insurance
- Homeowner’s insurance
- Renter’s insurance
- Commercial liability insurance
Who Can Sue for Bad Faith in Colorado?
Colorado’s improper denial of claim law refers only to the first-party claimant. This is the policyholder or the person who has the insurance coverage, such as a dependent of the policyholder or another household member. A third party in Colorado cannot directly file a bad faith insurance claim against someone else’s insurance provider. This is because the duty of good faith and fair dealing is a product of the insurance contract between the insured and the insurer.
Bad Faith Auto Insurance Claims
Insurance bad faith practices often come into play in cases involving car accidents. First-party claims can arise out of cases involving the following types of car insurance:
- Uninsured motorist coverage: Uninsured motorist (UM) coverage pays for damages when the at-fault driver is uninsured or cannot be identified (such as in a hit and run). This coverage is optional in Colorado, but many drivers choose to include it with their auto insurance policy to protect themselves in case an irresponsible driver harms them.
- Underinsured motorist coverage: Car accidents can cause substantial damages. These damages sometimes exceed the amount of the at-fault driver’s liability insurance. Vehicle operators may decide to purchase underinsured motorist (UIM) coverage to cover the gap between the at-fault liability coverage and their actual damages, up to policy limits.
- Medical payments coverage: MedPay covers immediate and necessary medical services after a car accident resulting in injury. If your insurance denies these expenses, you could have a bad faith insurance claim.
- Comprehensive and collision coverage: Comprehensive and collision coverage pay for damage related to weather, acts of God, vandalism, and damage to the vehicle caused in a motor vehicle collision.
- Liability coverage: While liability coverage pays for someone else’s damages, you could have a bad faith insurance claim against your auto insurance provider if it wrongfully denied a claim from another party and they sued you.
Recoverable Damages for Bad Faith Insurance Claims
Bad faith insurance laws try to put claimants back in the position they would have been in had the insurance company acted correctly. They also aim to deter misconduct from insurance providers. As such, plaintiffs in bad faith insurance lawsuits may be able to recover the following types of damages:
Economic Damages
Economic damages are the actual damages you suffered because of the insurance company’s misconduct that involves direct financial losses, such as:
- Car repairs
- Medical expenses you were forced to pay out of pocket
- Lost wages due to your injuries
- Attorney fees for pursuing the case
Statutory Damages
The court calculates the insurance benefit you should have been paid, doubles it, and awards it to plaintiffs who win bad faith insurance lawsuits. Plaintiffs can also be awarded their attorney’s fees and court costs.
Non-Economic Damages
Non-economic damages can compensate for the actual damages you suffered that are not tied to a direct monetary figure, such as physical pain and suffering or emotional distress.
Punitive Damages
The court can award exemplary damages if it determines that the insurance company’s bad faith tactics occurred due to fraud, malice, or willful and wanton conduct.”
Time Limit to File Bad Faith Insurance Claims in Colorado
The time limit for taking specific legal action is referred to as the statute of limitations. The statute of limitations for personal injury cases and tort claims is generally two years in Colorado. Therefore, you likely have only two years to file a lawsuit against the insurance provider to preserve your rights.
However, there is an exception for claims involving uninsured or underinsured motorist coverage. This type of claim has a three-year statute of limitations. The law provides additional time to claimants so they can ascertain if they can make a bodily injury liability claim against the at-fault driver and whether their insurance coverage is enough to cover their losses.
By contacting an experienced Denver bad faith insurance lawyer as soon as possible, you can protect your legal rights and ensure there is adequate time to file all relevant legal claims.
Contact a Denver Bad Faith Insurance Lawyer for Help
You purchase insurance hoping you’ll never have to use it. However, if you’re involved in a tuition covered by insurance, you reasonably expect the insurance company to treat you fairly and pay a fair amount for your claim. After all, you’ve paid your premiums regularly and on time.
If your insurance company has wrongfully denied your claim, is giving you the run-around after you have filed a claim, fails to communicate with you, or refuses to give you relevant information about your insurance policy, you may have a valid insurance bad faith claim. An experienced Denver bad faith insurance attorney from Dulin McQuinn Young can help.
Contact our legal team today for a free, no-obligation consultation. We can discuss your situation and how we can help.