If they promptly pay their premiums, they expect the insurance coverage to make them whole again after the unexpected happens.
Insurance is meant to be a safety net.
But sometimes, insurance companies delay paying claims or try to avoid covering the loss altogether.
What Is Bad Faith?
Insurance policies are not like other kinds of contracts.
As the Colorado Supreme Court has explained, people do not buy insurance to make money or obtain some commercial advantage.
Rather, they “enter into insurance contracts for the financial security obtained by protecting themselves from unforeseen calamities and for peace of mind.”
Almost by definition, you only need to use your insurance when something has gone terribly wrong.
Under these circumstances, it is particularly upsetting when an insurance carrier does not uphold its end of the bargain.
That is why the law states that insurance companies owe their customers a duty of good faith.
If they do any of the following, it may be a breach of that duty as well as a breach of the insurance contract:
- Fail to promptly investigate your claim,
- Neglect to communicate with you regularly about the status of your claim,
- Misrepresent relevant insurance policy provisions or facts about your claim,
- Unreasonably delay paying your benefits,
- Offer you a lowball amount that is less than you are due under your policy,
- Refuse to defend you in a liability action where your policy arguably covers one or more claims, or
- Unreasonably deny your claim.
In all of these cases, you should try to work with your insurer to come to a fair agreement.
But if they refuse, you may need to take legal action to hold them accountable for handling your claim in bad faith.
How Can a Bad Faith Insurance Attorney Help?
Insurance companies typically have teams of lawyers representing them. They know how to fight lawsuits and avoid paying the full amount due under insurance policies.
So when your financial security is on the line, you want a bad faith insurance lawyer on your side who knows how to beat these companies at their own game.
After reviewing your policy, the first thing your lawyer will do is send a letter to the insurance company informing them that you are represented by counsel.
The letter spells out your claim and the time limit for payment. This alone might inspire them to be more reasonable.
If not, your attorney will file a lawsuit.
How Much Can I Recover in an Insurance Bad Faith Lawsuit?
When an insurer fails to pay a valid claim, your insurance bad faith lawyer can sue for breach of contract and bad faith.
Common law provides a cause of action for bad faith, and Colorado Revised Statute §10-3-1116(1) also prohibits insurance companies from unreasonably delaying or denying benefits.
Depending on the claims you bring, you might recover one or more of the following:
- The value of the unpaid insurance proceeds,
- Noneconomic damages like pain and suffering,
- A statutory award of two times the covered benefit,
- Attorney fees and court costs, and
- Punitive damages.
Though punitive damages are rare, they are intended to punish insurance company misconduct and to deter future bad faith dealings with customers.
Why Do I Need an Insurance Bad Faith Lawyer from the Tenge Law Firm?
Many firms take on almost every case that comes through the door.
This might seem like a good thing, but it often leaves attorneys overworked and without ample time to communicate with clients or properly focus on their cases.
The Tenge Law Firm, LLC, is different. We selectively choose our cases, and then provide our clients with white-glove, concierge-level legal services.
As a result, our clients report being exceedingly happy with our representation.
If your automotive, homeowner’s, medical, or disability insurance company unreasonably delayed or denied paying claim benefits, contact the Tenge Law Firm, LLC for a free consultation today.