We’ve all been there, or we know someone who has; feeling the frustration of waiting for an insurance company to decide on a claim, or seeing an offer that is substantially less then your expenses come in, or having a legitimate claim flatly denied. Sadly, up until recently, there was little that could be done about it. Sure, there were a few lawsuits that you could file, a few complaints you could make, but all of these had huge obstacles to success. Basically, unless things were horrendously and catastrophically bad, unless the insurance company was behaving in an almost criminal manner or endangering the public, there was nothing to be done. At the end of the day, you just had to take it.

But not any more, thanks to a historic bill passed by the Colorado Congress and signed into law by Governor Bill Ritter. House Bill 1407 will, to cut through the legalese and put it simply, allow normal people to file a lawsuit when their insurance company delays, decreases, or denies a claim on an unreasonable basis. You and I, and every individual, are held to a “reasonable person” standard, and now that is the same standard that will apply to insurance companies when they make claim decisions.

This shouldn’t tread on any insurance company toes. If a claim is clearly excessive, it can be denied, so can a frivolous claim. All this means is that insurance companies must behave reasonably; they can’t delay a decision indefinitely, they can’t offer substantially less then a claim in the hopes that the injured person will take the lesser amount and just go away, and they can’t arbitrarily deny a valid claim. And if an insurance company does any of these things, if they fail to live up to the requirements of their insurance policies and contracts, then the law will help individuals to recover that which is owed to them. It even allows for increased damages and attorney’s fees, maximizing both the penalty to the insurer and easing any burden on the injured person.

All in all, this new law will serve as a powerful tool for helping injured people, and the only people that it will harm are those insurance companies who are attempting to put the screws to their customers.

Nathan T. Swanson
Summer Intern
JD Candidate, 2009
University of Denver

Flooding and no insurance coverage is about to become much more common in the Mississippi Gulf Coast. State Farm announced that it will not be renewing homeowners policies to those living within 1,000 feet of the beach and those between 1,000 and 2,500 feet will not be getting wind coverage renewed. Mike Chaney, the Mississippi Insurance Commissioner, is confident that people will be able to get coverage and states that rates may even decrease.

However, I am wondering, will it really decrease the rates. And will everyone be able to get covered? The real question is whether any other insurance companies will follow suit. If they do, basic economics tells us that the rates will go up. The less companies offering insurance to homeowners in that area, the less supply. People are unlikely to move at any significant number away from the area so demand will not substantially change. This will drive up the price. Also, if less companies are offering the insurance, the more risk they are taking on to pay out, so naturally the price would increase that homeowners pay for insurance. The fear of flooding without insurance coverage is well deserved for homeowners after Katrina, and with the recent developments up north in the Midwest.

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John Elway, the Hall of Fame Denver Broncos quarterback, recently made two of his younger kids sign a downloadable contract between parents and teenagers which promotes safe teen driving. Presently, Elway serves as a spokesperson for Allstate Insurance Co.’s teen safe driving campaign.
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Quick question. Do you really understand how your uninsured/underinsured motorist coverage (”UM/UIM”) currently works in Colorado?
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A seemingly innocuous proposed bill has recently come under attack by our very own Rocky Mountain News. (To read the editorial, click here). Senate Bill 248 is a bill that will exponentially help consumers and the medical community. It’s aimed at education and informed choice in the realm of medical malpractice insurance. SB 248 allows for a hearing in front of the Colorado insurance commission, upon request, only when an insurance carrier with a 65% or greater market share requests a global rate increase of 5% or more. What does this mean? It means that the larger medical malpractice insurers in the state would be required to actually inform its insureds if it decides to increase rates by 5% or more. This is a good thing because these measures, if implemented, would promote transparency and the free flow of information sharing. It ensures that doctors are informed when COPIC wants to increase rates of 5% or more and ensures that the increase is fair and reasonable given changing conditions. SB 248 protects doctors from unilateral rate increases not in line with the needs of Colorado’s medical community.
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The recent natural disaster to hit Colorado came as a complete shock to the residents of Holly, Colorado. Seeing images of the vast path of destruction the tornado left behind serves as a reminder that adequate home insurance coverage is necessary to begin to rebuild. Is your home insurance adequate? Here are some basic tips and links to help you determine whether you and your family are protected.
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CNN’s Anderson Cooper 360 Degrees aired a segment on February 26, 2007, called “Keeping them Honest.” This segment clearly shows what lengths State Farm and Allstate will go to avoid paying valid and legitimate claims.
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I have recently seen news clips and information about how some victims of Hurricane Katrina have been shafted because of insurance company decisions not to pay for water and flood damage caused by the Hurricane.
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