Can You Sue an Insurance Company for Bad Faith in Colorado?
When you file an insurance claim, you trust the company to handle it fairly and efficiently. However, insurance companies don’t always act in good faith. Sometimes, they delay, deny, or mishandle claims for reasons that aren’t valid.
If this happens in Colorado, you may have the right to sue the insurance company for acting in bad faith. An experienced Denver bad faith attorney can guide you through the process.
What Is Insurance Bad Faith?
Insurance companies are legally required to act in good faith when processing claims. Bad faith refers to situations where an insurance company doesn’t live up to this responsibility, either by denying a valid claim, delaying payments without reason, or misrepresenting what the policy covers.
Some common examples of bad faith include:
- Unjustified Denial: denying a legitimate claim without a proper reason
- Delayed Payment: failing to pay a claim within a reasonable time frame
- Lowball Offers: offering an unreasonably low settlement that doesn’t reflect the full value of the claim
- Misrepresentation: providing misleading information about the policy or claim process
- Failing to Investigate: not conducting a thorough investigation into the claim before denying it
When an insurance company acts in bad faith, it can cause financial and emotional harm to the policyholder. Colorado law protects consumers by allowing them to sue an insurer if they act in bad faith.
Colorado Bad Faith Insurance Laws
In Colorado, two main types of legal claims address bad faith:
Common Law Bad Faith
This type of claim occurs when an insurance company acts untruthfully and fails to meet its duty to handle claims fairly. The injured party must prove that the insurer withheld benefits they were entitled to.
Statutory Bad Faith
Under Colorado Revised Statutes § 10-3-1115 and 1116, policyholders can pursue statutory bad faith claims if an insurance company unreasonably delays or denies a claim.
If successful, the claimant may be entitled to double the damages and payment of attorney’s fees.
Proving Bad Faith in Colorado
To win a bad faith lawsuit against an insurance company in Colorado, you must demonstrate:
- A Valid Insurance Claim: You have to show that the claim you submitted was valid and covered under the terms of your insurance policy.
- Unreasonable Conduct by the Insurer: The insurance company’s actions were unjustified. For example, they delayed payment without proper investigation or denied the claim without a legitimate reason.
- The Insurer’s Knowledge or Disregard: You must also prove that the insurance company either knew they were acting unreasonably or showed a reckless disregard for your claim.
It’s important to gather documentation like emails, letters, medical records, and policy information to support your case as evidence. Witnesses or experts may also be helpful to prove that the insurance company acted improperly.
How Long Do You Have To File a Bad Faith Lawsuit in Colorado?
In Colorado, you have two years from discovering the bad faith action to file a lawsuit against your insurance company. This time limit, known as the statute of limitations, is critical. If you wait too long and miss this deadline, you may lose your right to pursue a claim.
While two years may seem like a long time, it’s best to act as soon as possible. Investigating a bad faith claim, gathering evidence, and building a strong case takes time. The sooner you contact an attorney, the better your chance of protecting your rights and securing compensation.
Contact our Denver Personal Injury Law Firm Today For Help
For more information please contact Zaner Harden Personal Injury Lawyers to schedule a free initial consultation with a Denver personal injury lawyer.
Zaner Harden Personal Injury Lawyers
1610 Wynkoop Street, Suite 120. Denver, CO 80202
(720) 613 9706
