How to File a Bad Faith Insurance Claim in Colorado

Colorado residents have specific legal avenues to pursue justice when an insurance company refuses to honor a legitimate claim. Our dedicated team of personal injury attorneys at Gerash Steiner Blanton, P.C., stands ready to answer your questions on how to file a bad faith insurance claim. In this blog post, we’ll discuss the steps you must take and the legal principles that apply when you believe an insurance provider is not living up to their contract by refusing to pay on a legitimate claim.

Understanding Bad Faith in Insurance

Bad faith insurance occurs when insurers deliberately evade their contractual obligations by refusing to pay valid claims, delaying payment, or making unreasonably low settlement offers. In Colorado, insurance companies owe their policyholders a duty of good faith and fair dealing. That means they must promptly investigate and fairly settle claims, explain policy terms, and communicate effectively throughout the process. 

Examples of potential bad faith actions include: 

• Not explaining specific policy terms to the policyholder;
• Failing to affirm or deny coverage within a reasonable time after the insured submits a claim; 
• Delaying a claims investigation with no justifiable reason; 
• Not responding or communicating despite repeated calls or messages from the policyholder; or
• Dragging their feet on settling a claim after determining the insured is entitled to a benefit. 

Note this is not an exhaustive list of bad faith actions. If you suspect your insurance company is engaging in insurance bad faith, it’s critical to speak with a lawyer immediately about your potential benefits. 

Legal Options for Policyholders

You must have a justifiable reason for suing an insurance company for bad faith. Below, you’ll find some of the most common reasons policyholders pursue a bad faith claim against their carrier. 

Breach of Contract

If you’ve fulfilled your part of the insurance contract but the insurer has failed to pay a valid claim, you may have grounds for a breach of contract lawsuit. To prove bad faith insurance practices, you must show evidence of all the following elements:

• The existence of a contract, 
• Your adherence to its terms, 
• The insurer’s failure to perform, and 
• The resulting damages.

You will not prevail if you cannot demonstrate evidence of all four criteria. 

Common-Law Bad Faith

This legal theory applies when an insurance company acts unreasonably, knowing or recklessly, disregarding the lack of a reasonable basis for their actions. Successful claims can recover the unpaid insurance proceeds and damages for emotional distress caused by the insurer’s bad faith conduct.

Statutory Bad Faith

Under Colorado Revised Statutes §10-3-1116(1), it’s considered unreasonable for an insurer to delay or deny payment without a legitimate reason. Victims of such practices can sue for reasonable attorney fees, court costs, and twice the covered benefit.

How to File a Bad Faith Insurance Claim

If you’re researching information on how to sue an insurance company for bad faith, it’s essential to ensure you’re prepared. Start by documenting everything. Keep detailed records of all communications with your insurance company, including dates, times, and summaries of conversations. Gather all relevant documentation related to your claim and the insurer’s response.

Review your insurance policy. Familiarize yourself with the specifics of your insurance policy, including coverage limits and any applicable exclusions. That will help identify how the insurer may have acted in bad faith. 

You should speak with a personal injury law firm experienced in handling bad faith insurance claims. Gerash Steiner Blanton, P.C. can provide the guidance and support to navigate these complex legal waters. Your next step might be to file a formal complaint against the insurance company with the Colorado Department of Regulatory Agencies. A representative there can investigate the matter and, if necessary, impose sanctions.

Based on your attorney’s advice, the next step is to file a lawsuit alleging breach of contract, common-law bad faith, or statutory bad faith, depending on the specifics of your case.

Why Choose Gerash Steiner Blanton, P.C.

Our firm is committed to ensuring insurance companies honor their obligations to policyholders. We have a deep understanding of Colorado’s insurance laws and a compassionate approach to our client’s needs. Our lawyers strive to achieve just outcomes for those wronged by their insurers. Our dedication to excellence and client satisfaction sets us apart, making us a trusted ally in your fight against bad faith insurance practices.

Contact Gerash Steiner Blanton, P.C. 

Filing a bad faith insurance claim in Colorado requires a strategic approach and a thorough understanding of insurance laws. With the right legal team representing you, you can challenge unfair practices and seek the compensation you deserve. If you have questions on how to file a bad faith insurance claim in Colorado, Gerash Steiner Blanton, P.C. stands ready to help. 

Remember, you are not alone in this fight. Protecting your rights and securing a fair resolution is our top priority. Contact us today to discuss your case and explore your legal options.