PERSONAL INJURY - INSURANCE BAD FAITH
Insurance companies are in business to make a profit, and are regulated by Colorado law on how they conduct business. These laws require insurance companies to handle claims fairly and properly, and are found in the Colorado Revised Statutes (CRS). The Colorado Unfair Claims Practices Act is found at CRS § 10-2-1104 and controls how insurance companies must handle claims in Colorado.
There are two basic types of insurance claims: "first party" claims, where the person is making a claim with their own insurance company (like an uninsured or underinsured motorist claim; claim for payment of medical bills; claim for hail, fire or flood damage; etc.); or "third party" claim, where someone else is suing or making a claim against you for a crash, sidewalk trip and fall injury, dog bite, etc.). There are different laws or rules involved for "first party" and "third party" claims, and the insurance company must act reasonably and follow the law for both.
The Colorado Unfair Claims Practice Act requires the following:
- Insurance companies are not allowed to misrepresent coverage details or policy provisions;
- Insurance companies must promptly act on claims;
- Insurance companies must conduct a reasonable investigation of claims;
- Insurance companies must conduct a reasonable evaluation of claims;
- Insurance companies must have written standards for the investigation and evaluation of claims;
- Insurance companies can not refuse to pay a claim without a reasonable investigation;
- Insurance companies must either pay or deny a claim within a reasonable time;
- Insurance companies can not force their own insured to file a lawsuit to get payment of a valid and documented claim;
- Insurance companies can not try to settle a claim for less than the reasonable value of the claim;
- Insurance companies can not change the insurance policy, which is a legally binding contract, without the knowledge of its insured;
- Insurance companies can not unreasonably deny or delay the settlement of a valid and documented claim;
- Insurance companies must promptly give a reasonable explanation for the denial of a claim;
- Insurance companies can not threaten to cancel the insurance contract to force a low or unreasonable settlement of a claim.
Colorado law provides at CRS § 10-3-1115 and 10-3-1116 for the payment of the reasonable value of the claim (contract damages), and provides for additional double damages (twice the contract amount), plus reasonable attorney fees and costs, for an insured who wins a lawsuit against their own insurance company for unreasonable delay or denial of an insurance claim.
Insurance companies have to follow Colorado law in the handling of claims by their own insured (first party claims), and in the handling of claims by others against their insured (third party claims).
Call Colorado Springs Insurance Law Attorney Pit Martin for a free, no cost and no obligation consultation to discuss your case if an insurance company is unfairly or unreasonably denying your claim. Pit Martin is an experienced Colorado insurance law attorney with over 31 years handling insurance claims and insurance bad faith lawsuits. Call us today at (719) 578-5455 if you need help dealing with an insurance company and your claim.
723 South Cascade Ave.
Colorado Springs, CO 80903
Colorado Springs Injury Lawyer
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