Print This Page
Frequently Asked Questions About Insurance Bad Faith
Below are some frequently asked questions about insurance disputes and insurance bad faith. For more information on this topic, please visit the insurance bad faith subsection under Practice Areas.
What is insurance bad faith?
In Colorado, insurance companies have an obligation under state law to act in good faith. As part of this duty of good faith, insurance companies are required to do the following, among other things, in handling your claim:
- Promptly investigate your claim
- Promptly pay your claim
- Communicate regularly with you regarding the status of your claim
- Promptly pay you any undisputed portion of claim
- Provide a prompt and reasonable explanation of any claim denial or offer compromise settlement
If an insurer fails or refuses to do any of the above, then your insurance company may have acted in bad faith.
What kind of claims do I have?
If you suspect your insurance company has not complied with its obligations under Colorado law, you may have claims for breach of contract and breach of fiduciary duty. A breach of fiduciary duty occurs when an entity such as an insurance company assumes responsibility to act for your benefit with respect to purchasing or obtaining insurance coverage and fails to act in good faith for your benefit. In some circumstances you may also have claims for negligence, bad faith, and violations of the Colorado Consumer Protection Act.
What can I recover?
If an insurance company has acted in bad faith, you, as a consumer, may be eligible for up to three times the amount of insurance benefits owed to you in addition to interest on those benefits, attorney fees, costs of filing a lawsuit against the insurance company, punitive damages (damages designed to punish the insurance company for their wrongful behavior), and other damages.
[ Back To Top ]
Print This Page
