Stickelberger v. General Security National Insurance Company, et al.

Denver, Colorado insurance law lawyers represent the Plaintiff who sued the Defendant on bad faith beach of insurance contract theories.



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colorado bad faith breach of insurance contract law



In Colorado, insurance companies have a legal duty to act in good faith and deal fairly with their policyholders



. If an insurer unreasonably denies, delays, or underpays a legitimate claim, this constitutes a bad faith breach of the insurance contract.



Types of Bad Faith Claims in Colorado:



Colorado law provides several avenues for policyholders to seek legal recourse against insurers engaging in bad faith practices:



Breach of Contract: This claim asserts that the insurer failed to uphold its contractual obligations outlined in the insurance policy by refusing to pay a valid claim despite the policyholder fulfilling their duties.



Common-Law Bad Faith: This claim alleges that the insurer acted unreasonably, knowing or recklessly disregarding the lack of a reasonable basis for their actions. To succeed, the policyholder must prove they suffered damages, the insurer acted unreasonably, the insurer knew or recklessly disregarded the unreasonableness of their actions, and the unreasonable conduct caused losses.



Statutory Bad Faith: Colorado law, specifically C.R.S. §§ 10-3-1115 and 10-3-1116, prohibits insurers from unreasonably delaying or denying payment of a covered benefit. An unreasonable delay or denial is defined as one without a reasonable basis. This statutory claim allows policyholders to recover reasonable attorney fees, court costs, and twice the amount of the covered benefit that was unreasonably delayed or denied.



Examples of Bad Faith Practices:



Examples of potential bad faith practices by insurance companies include unreasonable delays in handling claims, unjust denial of claims, making lowball settlement offers, poor communication with the policyholder, misrepresenting policy language, and failing to conduct a proper investigation.



Remedies for Bad Faith Insurance Claims:



If a policyholder is successful in a bad faith claim, they may be awarded various forms of compensation. These can include the covered benefits that were unreasonably delayed or denied, economic damages for financial losses, non-economic damages for intangible harms like emotional distress, and possibly punitive damages to penalize severe misconduct. Additionally, under Colorado statute, policyholders may be entitled to twice the amount of the delayed or denied covered benefit, plus attorney fees and court costs.

Important Notes:



Not all errors or oversights by an insurer are considered bad faith. The statute of limitations for filing a bad faith claim in Colorado is generally two years from when the policyholder became aware of the insurer's conduct. Seeking legal counsel from an attorney specializing in insurance bad faith is advisable if you believe your insurer is acting in bad faith.

Settled for an undisclosed sum and dismissed.