The Basics of Bad Faith Insurance Claims in Colorado

November 1, 2022by Brett Buchheit

In Colorado, insurance companies sell insurance, but they also sell promises. Advertising slogans such as “Like a good neighbor” and “You’re in good hands” are feel-good soundbites, invoking good will and depicting insurance adjusters as day-saving heroes. Jake from State Farm may make you laugh during football halftime, but the reality of insurance companies is far grimmer. Unfortunately, insurance companies do not always follow through on their legal obligations. In the legal world, this is called insurance bad faith. 

A useful framing for insurance companies’ obligations is to regard them as the “Great 8s”: communicate, cooperate, investigate, and obfuscate. By law, insurance adjusters must communicate with motor vehicle accident victims (also known as claimants) in a timely manner. Insurance adjusters must also cooperate by engaging in a thorough investigation, working with the victim and their legal counsel to acquire property damage photos, details about post-accident medical care, traffic accident reports, lost wages, and other relevant information. Moreover, insurance adjusters must not obfuscate—making claimants jump through unnecessary hoops to reach settlement. Colorado legal statutes protect citizens from bad faith insurance actors. 

Bad Faith Insurance Statute Definition In Colorado

CO Rev Stat § 10-3-1115 (2020) prohibits insurance companies from delaying or denying, “payment of a claim for benefits owed to or on behalf of any first party claimant.” In other words, insurance companies must have reasonable justification for withholding payment

What Do You Stand To Gain From A Bad Faith Insurance Case?

As an example of a bad faith insurance argument, it would be unreasonable for an insurance company to issue payment amidst an on-going investigation. Moreover, law offices across the country send Settlement Demand letters to insurance adjusters requiring a written response within fifteen days. So, what do you stand to gain from a successful bad faith case?

Colorado Revised Statute, section 10-3-1116(1) states, “a first-party claimant…may bring an action in a district court to recover reasonable attorney fees and court costs and two times the covered benefit.” In addition to one-third of an insurance settlement, a successful bad faith claim would legally bind an insurance company to reimburse the cost of legal counsel, and possibly double the insurance settlement. 

Contact Rocky Mountain Personal Injury Lawyers For Colorado Bad Faith Claim Support

Attorney Brett Buchheit earned the moniker “Bad Faith Buchheit” due to his success with innumerable bad faith cases. If you are a victim of a motor vehicle accident and have reached a dead-end with the at-fault party’s insurance company, do not hesitate and contact Rocky Mountain Personal Injury Lawyers for a free consultation

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