Insurance Company Responsibilities

Posted: April 11, 2018

Know your rights and insurance company responsibilities

When you enter into a contract with a car insurance company, you should know your rights and understand insurance company responsibilities. Your insurance company is required to meet the terms of the contract, but we have represented several cases in which that didn’t happen.

We want our clients to be aware of the term “bad faith” and what it means to you in a personal injury case. In essence, an insurance company acts in bad faith when it breaches the terms of its contract with you.

In a bad faith case, the insurance company has breached its contract through:

Unreasonable delay or denial of a claim.
Violation of Colorado’s Unfair Claims Settlement Practices Act, which can include not thoroughly investigating the claim, paying far less than is reasonable, failing to provide an explanation of the settlement decision to the client and more.
– Willfully or knowingly acting unfairly toward the client.

Your insurance company is obligated to attempt “in good faith to effectuate prompt, fair, and equitable settlements of claims” (Colorado Revised Statute § 10-2-1104), and you may have a case against the company if they fail to do so.

Good faith rules of the road

In Colorado, insurance providers are obliged to act in good faith in dealing with their customers and customers’ claims.

Below is a partial list of the rules that insurance companies must follow:

– Claims should not be denied based on “surmise, speculation or injecture”
– Substantial, factual justification is required if a claim is denied
– Insurers should thoroughly investigate a customer’s claim
– Compensation for claims should not be unreasonably low
– Insurers should not offer employee incentives for denying or delaying claims processing
– Policyholders should be provided with all information related to their policy and how to qualify for benefits

Read more about these rules at ColoradoInjuryLaw.com.  

Work-related car accident results in bad faith judgement

In a case from a few years ago, Paul* approached us for representation after his auto insurance company offered him a low settlement following his on-the-job car accident. He required surgery, and his injuries forced him to change careers, which resulted in lost income.

We helped Paul file a bad faith case against his auto insurance provider, which had asserted that he was not eligible for his full uninsured/underinsured motorist (UIM) benefits outlined in his policy because he had already received benefits under his employer’s workers’ compensation policy.

The ultimate judgement found the auto insurance company to have acted in bad faith for denying full coverage and for delaying a review of Paul’s claim. Most importantly, this case resulted in favorable language in the judge’s order that will positively impact future bad faith cases for Coloradans.

*Names have been changed

Expertise in bad faith insurance cases

Keith Fuicelli has years of experience representing clients in bad faith insurance cases. In addition, he educates fellow attorneys on a variety of insurance issues and how to best represent clients. On Friday, April 20, he is chairing the Colorado Trial Lawyer Association’s insurance seminar to help train other attorneys on this important issue.

If you believe your insurance company has acted in bad faith in your car accident case, contact us for a free case evaluation.