When Insurance Delays Turn Into Denials: What Colorado Law Says About Bad Faith
When you’ve been in an accident, time feels heavy. The bills don’t stop coming just because an insurance adjuster hasn’t returned your call. But when weeks turn into months, and your claim is “still under review,” it may not be incompetence—it may be bad faith.
Colorado law protects policyholders from unfair claim practices. Understanding what qualifies as “bad faith” can help you take action before a delay turns into a denial.
What Counts as Insurance Bad Faith
Under Colorado Revised Statutes §10-3-1115 and §10-3-1116, insurance companies must handle claims promptly, fairly, and honestly. When they don’t, it’s called bad faith conduct.
Here are the most common examples:
- Unreasonable delays or repeated “we need more time” letters
- Denying claims without legitimate investigation
- Misrepresenting policy terms or coverage limits
- Offering unreasonably low settlements
- Failing to respond to communications in a timely manner
Insurers have a legal duty to treat claimants—including third parties—with good faith. When they fail that duty, they can be sued for damages, attorney fees, and sometimes double the amount of the unpaid benefit.
If you suspect your insurer is stalling or playing games, don’t wait. Call 720-928-9178 to talk directly with Flanagan Law about your situation.
How to Spot a “Delay Game”
Many insurers use subtle tactics to wear you down. Watch for these warning signs:
- “We’re still waiting on documentation.” They’ve had it for weeks.
- “Your claim is being transferred.” It’s not—it’s being buried.
- Changing adjusters repeatedly. A way to reset your claim’s timeline.
- Sudden requests for unnecessary paperwork. Designed to frustrate and delay.
- Low settlement offers labeled ‘final.’ Hoping you’ll give up.
These tactics may seem harmless, but they can cost you thousands. The law doesn’t expect patience forever—it expects fairness.
Colorado’s Legal Standards for Fair Claims
Colorado’s Division of Insurance requires companies to:
- Acknowledge receipt of a claim within 15 days
- Begin investigation within a reasonable time
- Make a final decision once adequate proof of loss is received
If your insurer drags its feet far beyond those limits, that’s not “normal backlog.” It may be statutory bad faith.
Don’t go through this alone. Call Flanagan Law at 720-928-9178 for a free consultation and find out if your delay qualifies as bad faith under Colorado law.
What You Can Recover in a Bad Faith Case
If you prove bad faith, you may recover:
- The amount originally owed under the policy
- Two times that amount as statutory damages
- Attorney fees and costs
This penalty exists to discourage unethical claim handling. It tells insurers that delay isn’t just annoying—it’s illegal.
Realistic Example: When a Delay Crosses the Line
Imagine you file a valid injury claim in September. The insurer requests basic medical documentation, which you provide in October. By December, you’ve received three identical “under review” emails and zero updates.
At that point, the delay may no longer be reasonable. An attorney can send a formal notice demanding action, and if ignored, initiate a bad-faith claim. That pressure often gets real results without even filing a lawsuit.
Tired of waiting? Call Flanagan Law at 720-928-9178 today for help dealing with unreasonable insurance delays or denials.
How to Protect Yourself from Insurer Abuse
- Keep every email, letter, and voicemail. Documentation is key.
- Request written explanations for any denial or delay.
- Track every date you sent or received claim-related communication.
- Avoid casual calls—insurers may record you.
- Consult an attorney early if you see repeated stalling tactics.
The earlier you push back, the stronger your case becomes.
FAQs
What’s considered an “unreasonable delay” under Colorado law?
There’s no fixed number of days. The key question is whether the insurer had all the information it needed yet failed to act within a reasonable timeframe.
Can I file a bad-faith claim even if my case eventually gets paid?
Yes. If you suffered financial harm or distress from a wrongful delay, you can still seek additional damages.
How long do I have to file a bad-faith lawsuit in Colorado?
The statute of limitations is typically two years from the date you knew (or should have known) of the bad-faith conduct.
Will filing a complaint with the state help?
Sometimes. The Colorado Division of Insurance can review complaints, but it can’t award damages. For financial recovery, you need to take legal action.
Do insurance companies settle bad-faith cases quickly?
Often yes. Once evidence of misconduct is clear, insurers prefer to resolve claims privately to avoid public exposure and penalties.
