If you've been wrongfully denied an insurance claim or experienced bad faith practices from your insurer in Colorado, you might be considering legal action. Insurance policies are meant to provide peace of mind, but when an insurer fails to uphold their end of the bargain, legal recourse may be necessary. This article guides you through how to sue an insurance company, whether it's for auto, medical, or other types of insurance.

Understanding Bad Faith Insurance Practices

Insurance companies have a duty to act in good faith and deal fairly with policyholders. Bad faith occurs when they:

• Unreasonably Deny Claims: Refusing to pay a legitimate claim without a valid reason.

• Fail to Investigate Properly: Neglecting to thoroughly examine the claim's merits.

• Delay Payments Without Justification: Intentionally slowing down the claims process to avoid payment.

• Offer Unreasonably Low Settlements: Proposing payouts far below the claim's actual value.

Steps to Sue an Insurance Company

1. Review Your Policy

Understand your coverage, exclusions, and obligations under the policy. Familiarize yourself with the terms and conditions to determine if the insurer violated any provisions. This knowledge forms the foundation of your lawsuit.

2. Document Everything

Keep records of all communications, documents, and evidence related to your claim. This includes emails, letters, phone call logs, claim forms, and any other relevant materials. Detailed documentation strengthens your case by providing proof of the insurer's actions.

3. Consult an Attorney

Legal expertise is crucial for navigating bad faith insurance lawsuits. An attorney specializing in insurance law can assess the validity of your claim, advise on the best course of action, and represent you throughout the legal process. They can also negotiate with the insurer on your behalf, potentially resolving the issue without litigation.

4. File a Complaint

Your attorney will draft and file a complaint in the appropriate Colorado court. The complaint outlines your allegations against the insurer, the legal basis for your claims, and the damages you seek. It must adhere to specific legal standards and procedural rules.

5. Serve the Insurance Company

Officially notify the insurer of the lawsuit through proper legal channels. This involves delivering a copy of the complaint and a summons to the insurance company's registered agent. Proper service is essential for the court to obtain jurisdiction over the defendant.

6. Litigation Process

Engage in discovery, attend hearings, and prepare for trial if necessary. During discovery, both parties exchange information and evidence pertinent to the case. Pre-trial motions may be filed, and settlement discussions can occur at any stage. If the case proceeds to trial, both sides present their arguments, and a judge or jury renders a decision.

Time Limits for Suing

In Colorado, the statute of limitations for filing a bad faith lawsuit is generally two years from the date of the bad faith action (C.R.S. §13-80-102). Failing to file within this period can result in losing the right to sue. It's important to act promptly and consult an attorney to ensure compliance with all deadlines.

Conclusion

Suing an insurance company is a complex process that requires legal expertise and a thorough understanding of insurance law. If you're on the western slope of Colorado and believe you've been treated unfairly, legal action may be your best recourse to obtain the compensation you're entitled to. An experienced attorney can guide you through each step, from initial consultation to final resolution, ensuring your rights are protected.

FAQs

How to Sue an Insurance Company for Bad Faith?

Consult an attorney to evaluate your case and file a lawsuit alleging bad faith practices. Your lawyer will handle the legal procedures, including drafting the complaint and representing you in court.

Can I Sue for Denied Auto Insurance Claims?

Yes, if the denial was unjustified or handled in bad faith. Legal action can compel the insurer to honor the policy terms and may result in additional damages.

How Long Do I Have to Sue an Insurance Company?

Typically, you have two years from the date of the bad faith action to file a lawsuit in Colorado. Consult an attorney promptly to ensure you meet all legal deadlines.

What Damages Can I Recover?

You may recover the amount of any denied benefits owed to you under the policy.  If you can establish that the carrier’s denial was unreasonable and in bad faith, you may be able to recover additional damages for economic losses, emotional distress, consequential damages and possibly punitive damages intended to punish the insurer for egregious conduct.  Further, under certain types of insurance policies (typically auto, property, disability, etc…) you may be able to recover two times the amount of any insurance benefits delayed or denied by the carrier without a reasonable basis–plus your attorney fees and costs.  

Do I Need a Lawyer to Sue an Insurance Company?

While not required, due to the legal complexities involved an attorney is highly recommended. They can navigate the intricate laws, procedural rules, and advocate effectively on your behalf.