Ever felt like your insurance company was playing games with your claim? You know the feeling – you’ve paid your premiums faithfully for years, then when you actually need coverage, they suddenly become experts at finding reasons to delay, deny, or lowball your claim. If that sounds familiar, trust me, you’re not alone. And here’s the good news: there might be legal options that go way beyond just getting your claim paid.
When insurance companies cross that line from simply denying a claim to acting in outright bad faith, Colorado law gives us a powerful tool called “punitive damages.” Think of these as the legal system’s way of saying, “Whoa, that behavior was so wrong, we’re going to make an example out of you.” But figuring out how punitive damages work in Colorado insurance bad faith cases isn’t super straightforward – and that’s exactly what we’re going to chat about today.
So, What Exactly Are Punitive Damages?
Let’s start with the basics. You’ve probably heard of “compensatory damages,” right? That’s the money meant to make you whole again after you’ve been wronged. For example, if your car gets totaled and your insurance company wrongly denies your claim, compensatory damages would cover the actual value of your car, maybe some rental car costs, and any other direct money losses you suffered. It’s about putting you back where you were.
Punitive damages are totally different. They’re not about making you whole – they’re about punishment and sending a clear message. When a court awards punitive damages, they’re essentially saying, “What you did was so over the top, so beyond acceptable, that we need to hit you where it hurts to make sure you never, ever do this again.”
In the insurance world, this is a really big deal because insurance companies, let’s be honest, are in a huge position of power. They’ve got teams of lawyers, adjusters, and seemingly endless resources. You? You’re probably dealing with an insurance claim while also trying to recover from whatever caused you to file the claim in the first place – maybe an accident, a fire, or an injury. The threat of punitive damages helps even that playing field a bit. It gives you some leverage.
How Colorado Sees Insurance Companies Behaving Badly
Colorado takes insurance bad faith pretty seriously, and honestly, it’s about time. The state understands that when you buy an insurance policy, you’re not just buying a piece of paper. You’re entering into a relationship where the insurance company has certain duties to you. It’s like a pact.
The Duty to Play Fair
Every insurance contract in Colorado comes with what’s called an “implied covenant of good faith and fair dealing.” This isn’t something written into your policy; it’s automatically part of the deal under Colorado law. Basically, it means your insurance company has to play fair with you, always.
What does “playing fair” look like? Well, it means they can’t:
- Unreasonably drag their feet on your claim
- Deny valid claims without a good reason
- Fail to do a proper investigation
- Twist or misrepresent policy language or what’s covered
- Refuse to defend you when they’re supposed to
When insurance companies break this duty, that’s when we start talking about bad faith. And when they break it in a particularly nasty way, that’s when punitive damages can come into play.
When It’s Your Own Company vs. Someone Else’s
Here’s where things get a little detailed, but hang with me because this difference really matters in Colorado.
First-party bad faith happens when your own insurance company treats you badly. Maybe you’re filing a claim under your homeowner’s policy after a fire, and your insurance company just drags their feet, denies obvious coverage, or offers you way too little. This is between you and the company you’ve been faithfully paying premiums to.
Third-party bad faith involves someone else’s insurance company. Let’s say you’re rear-ended by another driver, and their insurance company refuses to pay your medical bills even though their insured was clearly at fault. You’re the “third party” in this situation.
Colorado handles these situations differently, and whether you can get punitive damages can depend on which type of bad faith you’re dealing with. Generally speaking, first-party bad faith cases have an easier path to punitive damages, but that doesn’t mean third-party cases are out of luck. It just means the rules might be a little different.
When Can You Actually Get Punitive Damages?
This is the big question – and sometimes, literally, the million-dollar question. Colorado doesn’t hand out punitive damages like Halloween candy. There are specific, high requirements that need to be met.
The Legal Standard: “Willful and Wanton”
Under Colorado law, punitive damages are available when the defendant’s conduct was “willful and wanton” or showed a “conscious disregard” for the rights or safety of others. In insurance bad faith cases, this typically means the insurance company didn’t just make a mistake. They acted with deliberate indifference to your rights, or did something so unreasonable that it showed they simply didn’t care about their duties.
Let me give you a real-world example to paint a clearer picture:
Imagine your house burns down, and you file a claim with your homeowner’s insurance. A reasonable denial might be if there was genuine uncertainty about the cause of the fire and whether it was covered. Bad faith might be if they denied your claim based on a clearly inapplicable policy exclusion. But willful and wanton conduct? That might be if they had multiple experts confirm the fire was covered, their own internal emails showed they knew they should pay the claim, but they denied it anyway, hoping you’d just give up or accept a ridiculously low settlement. See the difference? It’s about intent and extreme disregard.
Proving They Knew Better
To get punitive damages in a Colorado insurance bad faith case, you typically need to prove a few key things:
- The insurance company broke their promise of good faith and fair dealing. This is your basic bad faith claim.
- That broken promise caused you harm. You actually lost money or suffered because of what they did.
- Their conduct was “willful and wanton.” They didn’t just mess up; they acted with conscious disregard for your rights.
That third part is where most cases win or lose when it comes to punitive damages. Courts want to see solid evidence that the insurance company knew they were acting improperly but did it anyway.
What Kind of Evidence Helps?
So, what kind of evidence might really strengthen a punitive damages claim? Here are some examples I’ve seen make a big difference:
- Internal communications: Think emails, memos, or recorded calls where insurance company employees admit they should pay a claim but decide not to for shady reasons. It’s like getting a peek behind the curtain.
- A pattern of similar behavior: Evidence that the insurance company has a history of these same bad faith practices, suggesting this wasn’t just a one-off mistake.
- Money talks: Evidence that the denial was clearly motivated by the insurance company’s desire to save money, rather than legitimate coverage concerns.
- Ignoring their own experts: When the insurance company’s own experts recommend paying a claim, but management overrides them for improper reasons.
- Destroying evidence: If the insurance company tries to hide or destroy relevant documents they’re supposed to keep. That’s a huge red flag!
Common Bad Faith Scenarios That Might Lead to Punitive Damages
Let’s talk about some real-world situations where punitive damages might come into play. These aren’t just theoretical; these are the kinds of cases that happen to real people every day.
The Delay Game
One common bad faith tactic is the endless delay. Your insurance company doesn’t outright deny your claim – they just… never quite get around to resolving it. They ask for the same documents multiple times. They schedule inspections and then don’t show up. They promise to call you back and then vanish.
Now, some delays are reasonable. If your claim is super complex or there are legitimate questions that need investigation, that’s understandable. But when delays are clearly a tactic – designed to pressure you into accepting a lower settlement or to simply avoid paying altogether – that can absolutely cross into bad faith territory.
For punitive damages, you’d need to show these delays were particularly over the top and intentional. Maybe internal emails show adjusters were actually instructed to “slow-walk” certain types of claims, or evidence that they had all the information they needed months ago but kept stringing you along anyway.
The Lowball Settlement
Here’s another classic: your insurance company admits they owe you something, but their settlement offer is ridiculously low. Your car is clearly worth $20,000, but they offer you $8,000 and claim that’s all it’s worth.
Again, not every low settlement offer is bad faith. Insurance companies are allowed to negotiate, and they don’t have to accept your valuation without question. But when their offer is so unbelievably low that it couldn’t possibly be based on any legitimate evaluation, that’s when we start talking about bad faith.
For punitive damages, you’d want evidence that they knew their valuation was bogus. Maybe their own appraiser said the car was worth $19,000, but they offered you $8,000 anyway. Or maybe they used a valuation method they knew was totally inappropriate for your specific situation.
The Coverage Denial Shuffle
This one’s particularly frustrating. You file a claim, and your insurance company denies it based on a specific policy exclusion. You challenge the denial, pointing out that the exclusion doesn’t apply. So they deny it again, this time based on a different exclusion. You challenge that one, and they find yet another reason to deny your claim.
It’s like playing whack-a-mole, except the stakes are your financial well-being. This kind of constantly shifting justification can be strong evidence of bad faith, especially if none of the reasons they give hold water.
The “Investigation” That Wasn’t
Insurance companies have a duty to reasonably investigate claims before denying them. Sometimes, though, they skip this step entirely or conduct such a shoddy investigation that it’s clear they were just looking for reasons to deny your claim from the start.
I’ve seen cases where insurance companies denied fire claims without ever visiting the property, or denied injury claims without reviewing basic medical records. When the “investigation” is clearly just going through the motions to justify a predetermined denial, that can support both bad faith and punitive damages claims. It shows a conscious disregard for their duty.
How Much Money Are We Talking About?
Alright, let’s talk numbers. How much can punitive damages actually be in Colorado insurance bad faith cases?
The Cap (and When It Doesn’t Apply)
Colorado has a cap on punitive damages, but it’s not a simple flat dollar amount. Generally, punitive damages are capped at the amount of “actual damages” awarded. So, if you win $50,000 in compensatory damages (your actual losses), your punitive damages would typically be capped at $50,000 as well.
But here’s where it gets interesting: if the insurance company’s conduct was clearly motivated by financial gain and they kept doing the harmful thing even after being given specific written notice that it was wrong, the cap jumps to three times the actual damages. Using our example above, that could mean up to $150,000 in punitive damages. That’s a much bigger hit!
There are also situations where the cap doesn’t apply at all. If the case involves fraud, for instance, the statutory cap goes right out the window. Given that some insurance bad faith conduct can definitely feel like fraud, this exception can be pretty significant.
Real-World Examples
While I can’t share specific client details, I can tell you that punitive damages awards in Colorado insurance bad faith cases have ranged from tens of thousands to millions of dollars, depending on how incredibly egregious the conduct was and how big the insurance company involved is.
The key thing to remember is that punitive damages aren’t just about punishing the insurance company – they’re also about deterrence. A $50,000 punitive damage award might sting a small regional insurer, but it’s pocket change to a major national company. Courts definitely take this into account when figuring out the amount.
Why the Insurance Company’s Size Matters
Speaking of the insurance company’s size, this is actually a really important factor in punitive damages cases. Colorado courts are allowed to consider the defendant’s financial condition when deciding how much to award.
Think about it this way: if the goal is punishment and deterrence, the punishment needs to be meaningful to the entity being punished. A $100,000 punitive damage award might be devastating to a small local insurance company, but it’s basically a rounding error to a giant like State Farm or Allstate. It needs to hurt enough to make them think twice next time.
This is why you’ll sometimes see punitive damage awards that seem huge compared to the actual damages suffered. It’s not that the court is being excessive; they’re trying to impose a punishment that will actually be felt and will deter similar conduct in the future.
Showing Them the Money (Their Money, That Is)
In cases where punitive damages are being sought, it’s common for your attorney to present evidence about the insurance company’s financial health. This might include:
- Annual revenue and profit figures
- Executive compensation (how much the big bosses make!)
- How much money they have tucked away in reserves
- Information about previous punitive damage awards they’ve paid (or how little impact they seemed to have)
The whole point is to show the court what level of punitive damages would actually make a difference to this particular defendant.
What the Insurance Company Will Argue
Of course, insurance companies don’t just roll over when faced with punitive damage claims. They’ve got their own playbook of defenses, and understanding these can help you better evaluate your own case.
“It Was a Legitimate Disagreement!”
This is probably their favorite defense. The insurance company argues that there was a legitimate disagreement about coverage, and therefore their denial wasn’t in bad faith – it was just their interpretation of the policy.
This defense can work when there’s genuinely unclear policy language or really complex factual issues. But it falls apart pretty quickly when the insurance company’s interpretation is clearly unreasonable or when they keep changing their reasons for denial.
“We Did a Reasonable Investigation!”
Here, the insurance company argues that they conducted a reasonable investigation and their denial was based on what they found. Even if they were ultimately wrong, they’ll claim they weren’t acting in bad faith.
This defense works best when the insurance company can show they actually did investigate, used qualified experts, and reached a conclusion that was at least arguably reasonable based on the information they had at the time.
“Our Lawyers Told Us To!”
Sometimes insurance companies will claim they were acting on the advice of their attorneys, and therefore couldn’t have been acting in bad faith. This defense has some limitations, though – the advice has to have been reasonable, and the insurance company has to have fully told their attorney all the relevant facts. They can’t just get bad advice and hide behind it.
“You Were Already Struggling!”
This is a more subtle, and frankly, pretty heartless defense. The insurance company might admit that their conduct might have been problematic, but argue that any harm you suffered was due to your own financial circumstances, not their actions. Essentially, they’re saying, “Sure, we delayed payment, but you only suffered damages because you couldn’t afford to wait.”
This defense is pretty tone-deaf, in my opinion, but it does come up. The problem with it is that insurance companies know their insureds are often in vulnerable financial positions – that’s exactly why the duty to play fair exists in the first place!
Building a Strong Punitive Damages Case
If you think you might have a case involving punitive damages, there are some things you should know about building a strong case.
Document Absolutely Everything
Seriously, I can’t stress this enough. Keep records of every single interaction with your insurance company. Save emails, take detailed notes during phone calls (including the date, time, and who you spoke with), and keep copies of all documents you send or receive.
Pay particular attention to any casual comments insurance representatives make. Sometimes these seemingly innocent remarks can be very revealing about their true motivations.
Don’t Just Accept the First “No”
Insurance companies often count on people giving up after the first denial. If you genuinely believe your claim is valid, don’t be afraid to challenge their denial. Ask for specific policy language that supports their position. Request copies of all documents they relied on in making their decision.
When you do challenge a denial, do it in writing. This creates a solid record and also starts the clock running on various deadlines that might be relevant to your case.
Get Your Own Experts
If your claim involves technical issues – like the cause of a fire, the extent of property damage, or the value of damaged items – seriously consider getting your own expert evaluation. Insurance companies have their own experts, and while these experts are supposed to be objective, remember who’s paying their bills.
Having your own expert can help level the playing field and can also provide powerful evidence of bad faith if there’s a huge difference between the expert opinions.
Be Wary of Quick Settlement Offers
Sometimes, when an insurance company realizes they might be facing a bad faith claim, they’ll suddenly become very eager to settle your original claim. While it’s tempting to take the money and move on, be aware that accepting a settlement might limit your ability to pursue bad faith damages later.
If you’re offered a settlement that seems too good to be true, or if the insurance company suddenly changes their tune after months of denial, it might be a really good idea to chat with an attorney before accepting anything.
What Happens in Court?
If your case does end up in court, here’s a quick peek at what you can expect when it comes to punitive damages claims.
Gathering the Evidence (Discovery)
Discovery is where both sides gather evidence to support their case. In punitive damages cases, this phase can be particularly detailed because you’re trying to get inside the insurance company’s decision-making process.
Your attorney will likely request internal emails, claims handling guidelines, training materials, and information about similar claims. They might also take depositions – basically, formal interviews under oath – of claims adjusters, supervisors, and other insurance company employees.
The insurance company, meanwhile, will be trying to gather evidence to support their defenses. They might argue that your damages weren’t as severe as you claim, or that their actions were reasonable under the circumstances.
The Split Trial (Bifurcated)
In many punitive damages cases, the trial is split into two phases. The first phase focuses on whether the defendant is responsible and, if so, what compensatory damages (your actual losses) should be awarded. Only if you win that first phase does the case move to the second phase, which focuses specifically on punitive damages.
This split approach makes sense because the evidence relevant to punitive damages – like the defendant’s financial condition and prior bad acts – might unfairly influence the jury when they’re just trying to decide the basic liability question.
The Punitive Damages Phase
If your case makes it to the punitive damages phase, this is where things get really interesting. The jury will hear evidence about:
- How truly awful the insurance company’s conduct was
- The need for them to be deterred (to prevent them from doing it again)
- The insurance company’s financial condition (their deep pockets, or lack thereof)
- Any past similar bad behavior
The insurance company will, of course, present their own evidence trying to make their conduct seem less awful and arguing that punitive damages aren’t needed.
Working with an Attorney: Your Ally
Let’s be real – insurance bad faith cases, especially those involving punitive damages, are complex. While Colorado doesn’t require you to have an attorney, trying to handle one of these cases on your own is like trying to perform surgery on yourself. Technically possible, but definitely not advisable!
What to Look For in a Lawyer Friend
Not all attorneys are created equal when it comes to insurance bad faith cases. Here are some things to look for:
- Experience with insurance bad faith cases: This is a very specialized area of law. You want someone who truly understands how insurance companies operate and what sneaky tactics they use.
- Trial experience: Many insurance bad faith cases settle, but insurance companies are much more likely to offer fair settlements when they know your attorney isn’t afraid to take the case all the way to trial.
- Resources: Insurance bad faith cases often require expert witnesses, lots of evidence gathering, and significant upfront costs. Make sure your attorney has the financial muscle to properly handle your case.
- Track record: Ask about the attorney’s past results in similar cases. While past results don’t guarantee future success, they can give you a good idea of the attorney’s capabilities.
The “Only Pay If You Win” Deal
Most insurance bad faith cases are handled on a contingency fee basis. This means you don’t pay attorney fees upfront. Instead, your attorney takes a percentage of any money you recover (typically 33-40% in Colorado).
This setup really puts your attorney’s interests right in line with yours – they only get paid if you win. It also makes legal representation accessible to people who couldn’t otherwise afford it.
At McCormick & Murphy P.C., we’ve been handling insurance bad faith cases for over 25 years. We totally get how frustrating it can be when an insurance company treats you unfairly, and we’re committed to holding them accountable. Our contingency fee arrangement means you don’t pay attorney fees unless we win your case.
What Your Attorney Will Do For You
A good insurance bad faith attorney will:
- Look at your case closely and tell you honestly about your chances of success.
- Handle all communications with the insurance company so you don’t have to.
- Gather all the evidence needed to support your claim.
- Bring in expert witnesses if they’re necessary.
- Negotiate with the insurance company on your behalf.
- Take your case to trial if a fair settlement just can’t be reached.
Your attorney should also keep you in the loop throughout the whole process and explain your options at each step of the case. They’re there to guide you.
What’s New in Colorado Law?
Colorado insurance bad faith law is always changing, and there have been some pretty important developments in recent years that could affect your case.
Legislative Changes
The Colorado legislature has been busy lately, working to strengthen protections for insurance consumers. Some of these changes have made it easier to prove bad faith and have increased the potential for damages.
For example, Colorado has expanded what counts as unfair claims practices and has given the state insurance commissioner more tools to keep an eye on insurance company behavior. While these changes mostly affect how regulators enforce the rules, they can also be helpful in private bad faith lawsuits.
Court Decisions
Colorado courts have also been refining the standards for insurance bad faith claims. Recent decisions have clarified what a “reasonable” investigation looks like and have provided guidance on when punitive damages are appropriate.
One trend I’ve noticed is that courts are becoming less tolerant of insurance companies that use delay tactics or that fail to clearly explain why they’re denying claims. This is good news for us consumers, but it also means that what counts as bad faith continues to evolve.
Regulatory Enforcement
The Colorado Division of Insurance has been more active in recent years in investigating and penalizing insurance companies for unfair claims practices. While regulatory action is separate from private lawsuits, evidence of regulatory violations can sometimes be used to support your bad faith claims. It shows a pattern.
Practical Tips for Dealing with Insurance Companies (Before Things Get Ugly)
While we’re talking about the legal remedies available when insurance companies act in bad faith, let me share some practical tips for dealing with insurance companies that might help you avoid problems in the first place – or at least document them properly if they do occur.
Know Your Policy Inside and Out
This sounds obvious, but you’d be surprised how many people file claims without really understanding what their policy covers. Read your policy – yes, all of it, even the boring parts. Pay particular attention to:
- What’s covered and what’s specifically not covered (exclusions)
- Your duties after a loss (like reporting requirements and cooperation clauses)
- Time limits for filing claims
- The claims process outlined in your policy
Understanding your policy puts you in a much better position to evaluate whether your insurance company is handling your claim appropriately. You’ll know if something’s off.
Report Claims Promptly
Most insurance policies require you to report claims “promptly” or within a specific time period. Don’t give your insurance company an excuse to deny your claim just because you reported it late.
When you do report a claim, get a claim number and the name of the person you spoke with. Follow up with a written report if the loss is significant.
Keep Super Detailed Records
I mentioned this earlier, but it’s worth repeating. Keep detailed records of absolutely everything related to your claim:
- Photos of damage (before and after!)
- Receipts for expenses (like temporary housing or repairs)
- Records of all communications with your insurance company (emails, call notes)
- Names and contact information for any witnesses
- Police reports or other official documents
Think of documentation as your insurance policy for your insurance policy. It’s your backup!
Answer your insurance company’s questions honestly – lying to your insurance company can void your coverage entirely. But you don’t need to volunteer information that wasn’t asked for.
If you’re not sure how to answer a question, it’s okay to say “I don’t know” or “I need to check on that.” Don’t guess or speculate. Stick to the facts.
Don’t Just Accept the First Settlement Offer
Insurance companies often make initial settlement offers that are lower than what your claim is actually worth. This isn’t necessarily bad faith; it’s negotiation. But don’t feel pressured to accept the first offer.
Take time to evaluate whether the offer fairly compensates you for your losses. If you’re not sure, consider getting your own estimate or chatting with an attorney.
Know When to Escalate
If you’re not getting anywhere with your claims adjuster, don’t be afraid to ask to speak with a supervisor. Sometimes a fresh set of eyes can resolve issues that seemed impossible.
You can also file a complaint with the Colorado Division of Insurance if you believe your insurance company is acting improperly. While the Division can’t force your insurance company to pay your claim, they can investigate and potentially take regulatory action.
Red Flags That Might Mean Bad Faith Is Happening
Here are some warning signs that your insurance company might be acting in bad faith. If you see multiple of these, it’s time to pay close attention:
Communication Issues
- They don’t return your calls or emails.
- They keep asking for the same documents repeatedly (even after you’ve sent them!).
- They give you different explanations for their decisions.
- They refuse to put their decisions in writing.
- Representatives seem totally unfamiliar with your file when you call.
Investigation Problems
- They deny your claim without really investigating it.
- They refuse to let you participate in the investigation (or keep you in the dark).
- They ignore evidence that clearly supports your claim.
- They rely on clearly biased or unqualified “experts.”
- They refuse to share their investigation results with you.
Settlement Issues
- They make ridiculously low settlement offers.
- They refuse to negotiate at all.
- They keep changing their settlement offers without any explanation.
- They pressure you to accept quick settlements.
- They claim they “don’t have authority” to make reasonable offers.
Delay Tactics
- They miss their own deadlines repeatedly.
- They schedule appointments and then don’t show up.
- They claim they’re “still investigating” months after your claim was filed.
- They require unnecessary paperwork or procedures.
- They seem to “lose” documents you’ve already provided.
If you’re seeing multiple red flags, it might be time to consult with an attorney who can tell you if you have a bad faith claim.
The Emotional Toll of Insurance Bad Faith
Before we wrap up, I want to acknowledge something that doesn’t get talked about enough: the emotional toll of dealing with insurance bad faith.
When you’re already dealing with whatever caused you to file an insurance claim in the first place – maybe your house burned down, or you were injured in an accident, or a loved one died – the absolute last thing you need is to fight with your insurance company too.
Insurance bad faith doesn’t just cause financial harm. It causes stress, anxiety, and a deep sense of betrayal. You did everything right – you bought insurance, paid your premiums, followed the rules – and now the company you trusted to be there for you is fighting you every step of the way. It’s truly exhausting.
This emotional impact is real, and it’s one of the reasons why punitive damages exist. The financial compensation is important, but so is the feeling that justice has been done and that the insurance company has been held accountable for their rotten conduct.
Don’t Let Them Wear You Down
Insurance companies know that claims disputes are stressful. Sometimes they’re counting on you getting so frustrated that you’ll just give up or accept less than you deserve just to make the whole thing end.
Don’t let them wear you down. If you have a valid claim, you deserve to have it handled fairly and in good faith. If your insurance company isn’t living up to their obligations, there are legal ways to make them.
Moving Forward: Your Next Steps
So where does this leave you? If you think your insurance company might be acting in bad faith, here are your next steps:
Take an Honest Look at Your Situation
Look at your situation objectively. Are you dealing with a legitimate coverage disagreement, or is your insurance company’s conduct truly unreasonable? Think about the red flags we discussed earlier.
Remember, not every claim denial is bad faith. Insurance companies are allowed to deny claims that aren’t covered by your policy, and they’re allowed to investigate before paying claims. The question is always whether their conduct is reasonable under the circumstances.
Gather All Your Documentation
If you think you might have a bad faith claim, start gathering your documentation now. The more evidence you have, the stronger your case will be.
This includes not just documents related to your original claim, but also evidence of your insurance company’s bad faith conduct – emails, recorded calls, witness statements, etc.
Seriously Consider Talking to an Attorney
If you’re dealing with what might be insurance bad faith, especially if punitive damages might be involved, it’s really worth consulting with an experienced attorney. Most attorneys who handle these cases will provide a free initial consultation where they can evaluate your case and explain your options.
At McCormick & Murphy P.C., we’ve been helping Colorado residents with insurance bad faith cases since 1995. We understand how insurance companies operate, and we’re not intimidated by their tactics. If you’re dealing with an insurance company that won’t play fair, we’d be happy to chat about your situation with you.
Don’t Wait Too Long
There are time limits (called “statutes of limitations”) that apply to insurance bad faith claims. In Colorado, you generally have three years from the date you knew or should have known about the bad faith conduct to file a lawsuit.
That might seem like a long time, but building a strong bad faith case takes time, and evidence can disappear if you wait too long. If you think you might have a claim, don’t put it off.
Know Your Rights
Remember, you have rights as an insurance consumer. Your insurance company owes you a duty of good faith and fair dealing. They can’t just treat you however they want because they have more resources or better lawyers.
If they break that duty, especially if they do so on purpose and without care, they can be held accountable – not just for your actual damages, but also through punitive damages designed to punish their conduct and stop similar behavior in the future.
Final Thoughts
Insurance bad faith cases, particularly those involving punitive damages, are complex and challenging. But they’re also incredibly important. These cases don’t just help individual consumers get the money they deserve – they also help hold insurance companies accountable and prevent future bad faith conduct.
The threat of punitive damages is one of the few things that can truly get the attention of a large insurance company. When they know that bad faith conduct could result in significant punitive damage awards, they’re much more likely to handle claims fairly in the first place.
If you’re dealing with an insurance company that you believe is acting in bad faith, please don’t give up. Document everything, know your rights, and don’t be afraid to seek legal help if you need it. You deserve to be treated fairly, and Colorado law provides meaningful ways to get justice when insurance companies fail to live up to their obligations.
The insurance industry is built on trust – you trust that if you pay your premiums and follow the rules, your insurance company will be there for you when you need them. When that trust is betrayed, the law provides ways to make things right. Punitive damages are one of those ways, and understanding how they work can help you protect your rights and hold insurance companies accountable for their actions.
Remember, you don’t have to face insurance bad faith alone. Experienced attorneys who understand these cases can help level the playing field and make sure your rights are protected. At McCormick & Murphy P.C., we’re here to help Colorado residents navigate these tough situations and get the justice they deserve.
Whether you’re dealing with a delayed claim, an unreasonable denial, or other bad faith conduct, know that there are legal remedies available. Punitive damages might be part of the solution, but the first step is understanding your rights and taking action to protect them.
Don’t let insurance companies take advantage of you. You have rights, you have options, and you have experienced legal professionals ready to help you fight for what’s fair. The path forward might not be easy, but with the right help and the right approach, you can hold insurance companies accountable for their bad faith conduct and get the compensation you deserve.
