Insurance Bad Faith

Many times, the insurance company may offer you a settlement you believe is lower than what you deserve, but is not out of line with the injuries you suffered. While you have the right to negotiate for a better settlement, the mere fact that they offered you a low settlement is not proof that the company is operating in bad faith.

Likewise, the insurance company may make an error in the facts of the case, leading them to deny the claim. You have the right to insist that the company re-evaluate the facts and correct the errors that led to their denial. However, a company operating in good faith may make a reasonable error that on having it pointed out, they are willing to correct. In such a case, the insurance company is not operating in bad faith.

In some cases, the facts are not in dispute, including the cost of medical expenses or other relevant expenses related to your injury. When an insurance company makes an offer well below the actual expenses in your case and offers no explanation of why the offer is too low, they may be operating in bad faith. An insurance company that refuses to communicate the reasons for their low settlement offer is not demonstrating the intention to operate in good faith.

In the same way, a company that denies a claim and provides no explanation of why the claim has been denied may be operating in bad faith, as well. This is more than simply disagreeing with the company over whether the claim should be accepted; this is a case in which the company simply refuses to have any dialogue over the facts of the case and why they reached their decision.

If you believe your insurer acted in bad faith, you will have to establish a series of facts to approve that bad faith occurred. Proving a bad faith insurance claim is similar to many other tort cases, where negligence is necessary to establish an at-fault party’s liability.

First, you will need to prove that you had an insurance policy with the insurer, which will establish the company’s duty of care to you. Having an auto insurance policy establishes a fiduciary relationship between you and your insurer, and because of this relationship, your insurer must act in good faith when handling your claims.

Next, you must prove the following elements.

• The insurer unreasonably denied or delayed payment for your claim.
• The insurer committed these actions with the knowledge or reckless disregard that the denial or delay of your claim was unreasonable.

Simply put, you must prove that the auto insurance company failed to pay your claim or delayed payment for your injuries without grounds to do so.

For example, say you are in a car accident with an uninsured driver who ran a red light and crashed into the side of your vehicle. You have uninsured motorist coverage through your insurance company, so you file a claim for your damages. The company denies your claim and refuses to communicate its reasons for doing so.

Under Colorado’s fault-based car insurance system, at-fault drivers pay for the damages of the injured. If the at-fault driver had auto insurance in this situation, you would have a strong case for a third-party insurance claim, since you can prove the at-fault driver’s negligence through medical records, traffic footage, and police reports.

You pay for uninsured motorist coverage in good faith each month, and expect the insurance company to uphold their end of the agreement in these exact situations. Your attorney can use multiple pathways to prove that the claim’s denial was unreasonable, such as insurance experts who can provide testimony on your behalf and evidence of the uninsured driver’s negligence under Colorado law.

You have the right to collect compensation for the damages you endured due to an insurance company’s act of bad faith. If you believe you have grounds for a claim, you will need to take the following steps to begin the filing process.

• Contact a Colorado bad faith attorney as soon as possible to discuss your case and learn how to best proceed with your claim.
• Review your insurance policy to ensure that your contract covers the claim you filed.
• Save all documentation and records associated with your claim, such as emails, receipts, reports, and other correspondence.
• Save all documents related to the denial of your claim.

After these initial steps, you and your attorney will determine your optimal path to compensation. Your car accident lawyer may send the company a written demand letter prior to filing a formal complaint or lawsuit on your behalf, and the company may settle your claim at this point. You may also file a complaint with Colorado Division of Insurance prior to progressing to a lawsuit in civil court.

Both policyholders and third parties can file bad faith claims against an insurance company. For example, if you are filing a claim under your own insurance company and believe your insurer acted in bad faith, you have the right to file a bad faith claim. If you are filing a claim with a third-party company, you may also pursue a bad faith claim if suspicious behavior arises.

While it is only necessary to prove the insurance company acted in bad faith in your particular case, an attorney may be able to show that the company has a pattern of acting in bad faith in other insurance claims, as well. It may be necessary to bring in expert testimony to show the facts of your case would usually warrant the claim being accepted, or a reasonable settlement offer. They will help prove the insurance company did not operate as you could reasonably expect.

If you believe the insurance company handling your claim is not operating in good faith, an attorney may well be the key to bringing them to the table. Our Denver personal injury attorneys of Jordan Law are experienced in helping Denver residents get the fair treatment they deserve from insurance companies.