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You paid your premiums on time. Year after year. You held up your end of the agreement. And now that you actually need your insurance company to do what it promised, you are getting the runaround.
Delayed responses. Requests for the same documents over and over. A claims adjuster who will not return your calls. Or worse — a flat denial with no real explanation.
This is not how insurance is supposed to work. When you buy a policy, you are entering into a contract. The insurance company takes your money and in return promises to handle your legitimate claims fairly and in good faith. When they refuse to do that, they are breaking the law.
That is called insurance bad faith. And there are legal consequences when it happens.
In Colorado, insurance companies are not just businesses trying to maximize profit. They are what the law calls fiduciaries. That means they owe you a duty of good faith and fair dealing. They are required by law to put your interests ahead of their own bottom line when handling your claim.
Bad faith happens when an insurer violates that duty. It can take many forms, but the core issue is always the same: the insurance company is prioritizing its financial interests over the valid claim of someone who paid for coverage.
Common examples include denying a claim without conducting a reasonable investigation. Refusing to pay what a claim is clearly worth. Delaying payment for months with no legitimate reason. Twisting the language of the policy to avoid coverage that should obviously apply. Pressuring you to accept a settlement far below what you are owed.
These are not accidents. Insurance companies employ teams of adjusters, lawyers, and consultants whose job is to minimize payouts. They know exactly what they are doing. They are betting you will give up or settle for less than you deserve because fighting them seems too hard.
One of the hardest things for people to accept is that their own insurance company — the one they have been paying faithfully — can be the bad actor. But it happens every day.
You might file a claim under your uninsured motorist coverage after a hit-and-run. Your insurer drags its feet, questions your injuries, and offers a fraction of your medical bills. You might file a homeowners claim after a fire, and the company sends an adjuster who undervalues the damage and denies half the claim. You might be rear-ended and use your own collision coverage, only to have the company deny the claim entirely based on a technicality buried in fine print.
The relationship feels personal because you have been a loyal customer. But to the insurance company, you are a line item. The moment you file a claim, the incentive structure flips. Every dollar they pay you is a dollar less in profit.
When your own insurer acts in bad faith, you have the right to sue them. Not just for the amount they should have paid in the first place. You can seek damages for the harm their bad faith conduct caused. And in some cases, you can pursue punitive damages designed to punish the company and deter future misconduct.
Bad faith does not always announce itself. Insurance companies rarely say they are denying your claim unfairly. Instead, they use tactics designed to frustrate you into giving up.
Unreasonable delays are one of the most common red flags. Colorado law requires insurers to acknowledge your claim promptly, investigate it thoroughly, and make a decision within a reasonable timeframe. If your adjuster takes weeks to return calls, repeatedly asks for documents you already provided, or lets your claim sit without explanation, that may be bad faith.
Denial without a real investigation is another major warning sign. If the company denies your claim based on assumptions rather than evidence, or refuses to send an investigator or an independent medical examiner when the facts are in dispute, they are likely violating their duty.
Lowball settlement offers are a classic bad faith tactic. The insurer offers you a small fraction of what the claim is worth and pressures you to accept it quickly. They may tell you it is all they can do, or that if you hire a lawyer the offer will disappear. Both are lies designed to protect their bottom line.
Misrepresenting the policy is another form of bad faith. The company may claim your policy does not cover something when it clearly does, or may interpret vague language in a way that benefits them rather than you. Policy language should be interpreted in favor of coverage, not used as a weapon against the policyholder.
Failure to communicate is also a red flag. If your insurer does not explain why it denied your claim, does not provide the policy provisions it relied on, or refuses to give you a clear path forward, that lack of transparency often indicates bad faith.
When an insurance company acts in bad faith, you are not limited to recovering the amount they should have paid in the first place. You can seek compensation for the additional harm their misconduct caused.
That includes the original claim amount — the benefits you were owed under the policy. If your medical bills totaled fifty thousand dollars and the insurer wrongfully denied coverage, you can recover that fifty thousand.
But you can also recover consequential damages. These are the losses that flowed from the bad faith conduct itself. If you could not pay your mortgage because the insurer delayed your claim, and you lost your house, those damages may be recoverable. If the stress of fighting the insurance company worsened a medical condition, you may be entitled to compensation for that harm. If you had to take out high-interest loans to cover expenses the insurer should have paid, the interest and fees may be recoverable.
Attorney fees and costs are also recoverable in many bad faith cases. Normally, each side pays its own legal expenses. But when an insurer acts in bad faith, Colorado law allows you to recover the cost of hiring a lawyer to hold them accountable. That levels the playing field and removes a major barrier to pursuing justice.
In cases involving particularly egregious conduct, punitive damages may be available. These are damages designed not to compensate you, but to punish the insurer and send a message that this behavior will not be tolerated. Punitive damages are not automatic, but they can be substantial when an insurance company engages in fraud, intentional misconduct, or willful and wanton disregard for your rights.
Time limits matter. In Colorado, you generally have three years from the date of the bad faith conduct to file a lawsuit against the insurance company. That might sound like a long time, but it can pass quickly, especially when you are dealing with the aftermath of an injury or loss.
The clock typically starts when the insurer takes the action that constitutes bad faith. If they wrongfully deny your claim, the three-year period usually begins on the date of that denial. If they engage in a pattern of delays and lowball offers, the timeline can be more complicated.
Waiting too long can cost you your right to hold the insurer accountable. Once the statute of limitations expires, your claim is barred no matter how strong your case might be. Insurance companies know this, and some use delay as a tactic hoping you will miss the deadline.
That is one reason it is critical to talk to a lawyer as soon as you suspect bad faith. Even if you are not ready to file a lawsuit, an attorney can preserve your rights and make sure you do not lose your claim because of a missed deadline.
First, document everything. Keep copies of every piece of paper the insurance company sends you. Save every email. Take notes after every phone call — write down the date, time, who you spoke with, and what was said. If the adjuster makes a promise, follow up with an email confirming what you understood. This documentation becomes evidence if you need to prove bad faith later.
Second, read your policy. You are entitled to a copy of the full policy, not just the declarations page. Request it in writing if the company has not provided it. Understand what coverage you purchased. Insurers count on policyholders not knowing what their own policies say.
Third, do not accept the first answer as final. If your claim is denied, ask for a written explanation including the specific policy language the company is relying on. If the explanation does not make sense or seems inconsistent with what you know about your coverage, push back. You have the right to appeal a denial.
Fourth, do not give a recorded statement without talking to a lawyer first. Adjusters often ask for recorded statements early in the process. Anything you say can and will be used to devalue or deny your claim. You are not required to give a recorded statement in most situations, and doing so without legal advice can hurt your case.
Fifth, do not settle for less than your claim is worth just because the insurer pressures you. Once you sign a release, you cannot come back later for more money even if you discover the settlement was unfair. Take the time to understand what you are owed.
Finally, talk to an insurance bad faith lawyer before the situation gets worse. You do not need to wait until your claim is formally denied. If the insurer is delaying, lowballing, or acting in ways that seem wrong, get legal advice. An attorney can often resolve the issue with a single letter. And if the insurer continues to act in bad faith, you will have someone in your corner who knows how to hold them accountable.
Insurance companies treat represented claimants differently than unrepresented ones. It is that simple.
When you are on your own, the insurer knows you probably do not understand the full scope of your rights. They know you may not recognize bad faith when it is happening. They know you are unlikely to sue because the process seems intimidating and expensive.
When you have a lawyer, the calculation changes. The insurance company knows it can no longer lowball you without consequences. It knows its conduct will be scrutinized by someone who understands insurance law. It knows that if it continues to act in bad faith, it may face a lawsuit that could cost far more than simply paying the claim fairly in the first place.
Often, a lawyer can resolve a bad faith situation without filing a lawsuit. A strongly worded letter laying out the facts, the law, and the potential consequences is sometimes all it takes to get the insurer to reverse course. But if the company refuses to do the right thing, your lawyer can take the case to court and pursue every dollar you are owed, including damages for the bad faith conduct itself.
Kirk McCormick and Jay Murphy built this firm to represent people, not corporations. Insurance bad faith cases are a core part of that mission because they involve a profound imbalance of power. You are an individual policyholder facing a billion-dollar company with an army of lawyers and adjusters. That company is counting on you to back down.
We do not back down.
We have represented clients across the Denver metro area and throughout Colorado — from Wheat Ridge and Lakewood to Aurora, Englewood, Littleton, Centennial, and Highlands Ranch. We have handled bad faith cases involving uninsured motorist claims, homeowners claims, disability claims, and more. We know how insurance companies operate. We know their tactics. And we know how to hold them accountable.
When you work with us, you are not a case number. You are a person who paid for a promise and got betrayed instead. We take that personally. We will investigate your claim thoroughly, gather the evidence to prove bad faith, and fight for every dollar you deserve — including the damages the insurer caused by refusing to do what it was supposed to do in the first place.
Our office is located at 1547 N Gaylord St UNIT 303, Denver, CO 80206. We serve clients throughout the Front Range, including Westminster, Thornton, Northglenn, Commerce City, Greenwood Village, Lone Tree, Parker, Castle Rock, Broomfield, Brighton, Longmont, Boulder, Louisville, Lafayette, Superior, Erie, Golden, Morrison, Evergreen, Conifer, and communities stretching to Fort Collins, Loveland, and Greeley.
Insurance is supposed to protect you when something goes wrong. You pay for that protection. You are entitled to it.
When an insurance company denies a valid claim, delays payment without reason, or pressures you into an unfair settlement, it is violating the law. You do not have to accept that. You have the right to fight back, and you have the right to be compensated not only for the claim they should have paid, but for the harm their bad faith caused.
If your insurance company is treating you like the enemy instead of the customer, call us. We will review what happened, explain your options, and help you understand whether you have a bad faith case. There is no cost for that conversation.
Reach McCormick & Murphy, P.C. at 888-668-1182. You can also visit https://mccormickmurphy.com/denver-personal-injury-attorneys/ to learn more about how we help people hold insurance companies accountable.
The insurance company had lawyers from the moment you filed your claim. You deserve the same.
Insurance bad faith in Colorado occurs when an insurance company violates its duty of good faith and fair dealing to a policyholder. This legal duty requires insurers to handle claims honestly, conduct reasonable investigations, and prioritize the policyholder’s interests when evaluating coverage. Bad faith can involve wrongfully denying a claim, unreasonably delaying payment, failing to investigate properly, misrepresenting policy terms, or offering settlements far below the actual value of a claim. Colorado law recognizes that insurance companies are fiduciaries who must act in your best interest, not just their own financial benefit.
Signs of insurance bad faith include unreasonable delays in responding to your claim or processing payment, denying your claim without conducting a thorough investigation, repeatedly requesting documents you have already provided, refusing to explain why your claim was denied or what policy provisions apply, offering a settlement that is drastically lower than your documented damages, misrepresenting what your policy covers, failing to return calls or communicate about your claim, and pressuring you to settle quickly before you understand your rights. If your insurer seems more focused on finding reasons to deny your claim than on evaluating it fairly, that is a strong indicator of bad faith.
Yes. You can sue your own insurance company if it denies your claim in bad faith. Many people are surprised to learn this, but the duty of good faith and fair dealing applies even when you are filing a claim against your own insurer for uninsured motorist coverage, underinsured motorist coverage, collision coverage, homeowners coverage, or disability benefits. When your insurer wrongfully denies a valid claim or handles it unfairly, you have the legal right to hold the company accountable through a lawsuit seeking not only the benefits owed but also damages for the harm caused by the bad faith conduct.
In a Colorado bad faith insurance case, you can recover several types of damages. First, you can recover the full amount of benefits the insurer should have paid under the policy. Second, you can seek consequential damages — losses caused by the bad faith conduct itself, such as financial harm from delayed payment, emotional distress, damage to your credit, or costs you incurred because the insurer refused to pay. Third, you can often recover your attorney fees and legal costs, which is unusual in most lawsuits but allowed in bad faith cases to level the playing field. Finally, in cases involving particularly egregious misconduct, you may be entitled to punitive damages designed to punish the insurer and deter similar behavior in the future.
In Colorado, you generally have three years from the date of the bad faith conduct to file a lawsuit against an insurance company. The statute of limitations typically begins when the insurer takes the action that constitutes bad faith, such as wrongfully denying your claim or engaging in a pattern of unreasonable delay. However, the specific timeline can vary depending on the facts of your case, and waiting too long can result in losing your right to pursue a claim entirely. It is important to consult with an attorney as soon as you suspect bad faith to ensure your rights are protected and you do not miss critical deadlines.
If your insurance company is delaying your claim, start by documenting everything. Keep copies of all correspondence, take notes after every phone call including dates and what was discussed, and follow up in writing to confirm any promises made by adjusters. Request a written explanation for the delay and ask for a specific timeline for resolving your claim. Read your insurance policy carefully to understand what you are entitled to and what deadlines the insurer must meet. Do not accept vague excuses or allow the company to string you along indefinitely. Most importantly, consult with an insurance bad faith lawyer. An attorney can send a demand letter that often prompts the insurer to take action, and if the delay continues, you may have grounds to pursue a bad faith claim for the damages caused by the unreasonable delay.
If an insurance company failed to investigate your claim, failed to pay you the compensation you are owed, failed to return your calls or emails, or engaged in other behaviors that you think might have been in bad faith, you should discuss your case with our Denver bad faith insurance lawyers as soon as possible.
When you pay an insurance premium to be insured, you should be able to expect that the insurance company will act in good faith and will properly investigate claims and attempt to provide insureds with reasonable compensation when it is appropriate.
While it is essential to remember that an insurance company is not on the side of the insured, the insurance company still has a duty to act in good faith.
If your insurance company has acted in bad faith, contact the bad faith insurance lawyers at McCormick and Murphy P.C. today for a free consultation.
In other words, although you should never expect an insurance company to advocate for your right to compensation or to advocate for you in general—even if you have been with the same insurance company for years or even decades—insurers still must treat you fairly.
An attorney at McCormick & Murphy, P.C. can evaluate your case and can discuss your options for filing a claim if an insurance company has treated you in bad faith.
Each state handles bad faith insurance claims under state law. Under Colorado law (CRS 10-3-1115 and 10-3-1116), insurance companies have a duty to act in good faith when handling insurance claims.
In Colorado, insurance bad faith law is statutory, but there is also case law that informs how courts in Denver handle bad faith insurance claims. The statute discusses bad faith as an “improper denial of claims.” The statute makes clear the following:
“A person engaged in the business of insurance shall not unreasonably delay or deny payment of a claim for benefits owed to or on behalf of any first-party claimant.” A first-party claimant is defined as “an individual, corporation, association, partnership, or other legal entity asserting an entitlement to benefits owed directly to or on behalf of an insured under an insurance policy.”
There are numerous ways in which an insurance company or an insurer may engage in bad faith. Common examples of Denver bad faith insurance claims include but are not limited to the following:
There are other ways that an insurance company can engage in acts of bad faith, as well. If you believe you have been treated unfairly by an insurance company, it is important to speak with a Colorado Spring bad faith insurance attorney. You may be eligible to file a lawsuit to seek financial compensation.
If you file a bad faith insurance claim in Denver and win your case, you can be eligible to receive a significant amount of damages under Colorado law, including the following:
Depending upon the amount of your original insurance claim and the length of time your case goes on, you could receive a substantial damages award by filing an insurance bad faith claim in Denver.
A bad faith insurance attorney in Denver at our firm can discuss the amount that you might expect by filing a lawsuit.
How do you file a bad faith insurance claim in Denver? You should begin the process by hiring an experienced Denver bad faith insurance lawyer who has experience handling cases similar to yours.
When you consult with an attorney, you should consider asking the following questions:
You should feel comfortable asking a potential lawyer any questions that seem important to you as you decide who to hire for your case.
Dealing with an insurance company that is acting in bad faith can be devastating, especially when you need that insurance money to cover medical expenses and lost wages. One of the experienced bad faith insurance attorneys in Denver at McCormick & Murphy, P.C. can speak with you today about your claim.
Call 720-782-8595 or contact McCormick & Murphy, P.C. for more information about our services in a bad faith insurance case in Colorado.
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Disclaimer: The information on this website is for information purposes only. This website should not be taken as legal advice. Prior results do not guarantee a similar outcome. This information should not be taken as the formation of a lawyer or attorney client relationship.
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