What Happens if the Insurance Company Won't Pay Your Claim?

It’s important to secure the right legal support in any bad-faith litigation. Over the past thirty years, Franklin D. Azar & Associates has emerged as the largest plaintiff-centered personal injury law firm in Colorado — in no small part because of its commitment to injured people and its willingness to take on even the largest insurance companies when the cause is just. Contact us today for a free consultation and no-obligation evaluation of your case.

Your Auto Policy is a Contract

Your auto insurance policy is essentially a contract with your insurance company: You agree to pay for coverage, and the insurance company is obligated under state law to compensate you in a fair and timely manner when you submit a legitimate claim for damages resulting from an accident. But in far too many instances, insurance companies have been known to reject claims, often without a reasonable explanation or an adequate investigation of the case.

When an insurance company arbitrarily rejects a claim, or attempts to settle that claim for far less than what would be considered reasonable under the circumstances, the policy holder can file a bad faith lawsuit against the company. “Bad faith” means that the company failed to do what it promised to do under the terms of the policy.

Bad faith lawsuits are much more difficult to pursue than the typical personal-injury claim arising from an accident. In addition to proving the damages resulting from the accident, the plaintiff also has to establish the wrongful conduct of the insurance company — and that company will have enormous resources it can draw upon in defense of its actions (or inaction). If you are considering a bad faith lawsuit, you should consider enlisting the aid of experienced attorneys and a law firm that has a proven track record in successfully fighting insurance companies.

Elements of a Bad Faith Case

In Colorado, an insurance company’s duties to its policyholders are, in part,  specified by statute, under the Unfair Claims Settlement Protection Act. Among other prohibited acts, insurers could be found engaging in unfair claims practices if they:

  • Misrepresent relevant facts about a claimant’s policy or coverage.
  • Fail to promptly acknowledge communications related to claims.
  • Fail to adopt reasonable standards for prompt investigation and settlement of claims.
  • Don’t attempt in good faith to reach a fair settlement of claims.
  • Unreasonably delay payment of claims.

Definitions of what is a “reasonable” offer of a settlement or a “reasonable” amount of time to process a claim can vary from case to case. Important elements in in any bad-faith case involve being able to establish that the plaintiff suffered serious and substantial injuries, and that his or her situation was exacerbated by the insurance company’s conduct — for example, by prolonged delays in handling the case or outright refusals to pay. Insurance companies found to have engaged in bad-faith conduct can be liable not simply for the benefits limits specified in the policy but three times that amount, plus reasonable attorneys’ fees and costs.

How Our Attorneys Help

Insurance companies often go to great lengths to defend their bottom line. That includes resisting paying out any more than they deem necessary on any claim, and sometimes denying or low-balling perfectly legitimate claims. If you are going to take on your insurance company in court for alleged bad faith, you should be prepared for a battle that will require time, patience, and expertise.

“The insurance companies defend these cases vigorously,” notes DezaRae LaCrue, an attorney at Franklin D. Azar & Associates who has successfully taken many bad-faith cases to court. “I tell my clients that, even if the law is on your side, it’s not a slam-dunk. It takes work. It takes experts. It takes resources.”

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