You faithfully pay your insurance premiums every single month, picturing a safety net ready to catch you if something goes wrong. And then, bam – disaster strikes. Maybe your house burns down, you’re in a nasty car accident, or a health crisis hits hard. So, you file your claim, totally expecting your insurance company to step up and have your back. But instead? They give you the runaround, drag their feet on payments, or just flat-out deny your legitimate claim.
Sound familiar? If it does, you’re definitely not alone, and you’re absolutely not crazy for feeling angry and frustrated. Let’s be real: insurance companies are businesses, plain and simple. And sometimes, unfortunately, they put their profits way before the people they’re supposed to protect. When that happens, you need more than just hope; you need someone in your corner who truly knows how to fight back.
What Exactly Is Insurance Bad Faith?
Okay, let’s talk turkey and break this down in plain English. Think of it like this: when you buy insurance, you’re essentially making a deal, a contract. You faithfully pay your premiums, and in return, they promise to cover legitimate claims based on your policy. Insurance bad faith? That’s when your insurance company totally drops the ball and doesn’t hold up their end of that deal – and usually, they know exactly what they’re doing.
Here’s what bad faith looks like in real life:
- Dragging their feet for months on end to investigate your claim, with no good reason in sight.
- Denying your claim outright without bothering to properly investigate it first.
- Offering you a ridiculously low amount of money, way less than your claim is clearly worth.
- Refusing to give you a straight answer about why they denied your claim or which specific policy language they’re supposedly citing.
- Making you jump through absolutely ridiculous hoops just to get basic information about your own claim.
- Pressuring you constantly to accept a lowball settlement, even though they know deep down you deserve much, much more.
The absolute key word here is “unreasonable.” Seriously, insurance companies can’t just throw darts at a board and do whatever they please. They have a very real, legal duty to treat you fairly and handle your claim honestly – in what’s called ‘good faith.’
Why Colorado Springs Has Seen a Surge in Bad Faith Cases
Here’s something that might really open your eyes: Colorado courts recently slapped an insurance company with a record-breaking $145 million verdict in a bad faith case. Yep, you read that right – $145 million! It even made national headlines. This wasn’t just about getting the original claim paid; it was about truly punishing that insurance company for their absolutely outrageous behavior.
What’s super interesting is that Colorado judges are clearly getting fed up with these kinds of insurance company tactics. They’re taking a much tougher, more aggressive stance against those frustrating delay tactics and bogus claim denials. Courts are really looking closely at how insurers behave, more than ever before, and they’re absolutely not shy about handing down serious penalties when companies step out of line.
This whole shift is creating a big ripple effect right across the entire insurance industry. Companies are practically scrambling to rethink their claim procedures and train their adjusters better. Why? Because they’re finally realizing that acting in bad faith now comes with some seriously hefty financial consequences.
The Real Cost of Insurance Bad Faith (It’s More Than You Think)
When most folks think about insurance bad faith, their minds usually jump straight to just getting their original claim paid. But here’s a little secret many people don’t realize: you can often recover way, way more than just that initial claim amount.
Under Colorado Revised Statutes 10-3-1115 and 10-3-1116, you might be entitled to:
- Economic damages: This covers your original claim amount, plus any interest, attorney fees, and other financial losses you’ve racked up.
- Non-economic damages: Think compensation for the emotional distress, any damage to your reputation, and all that immense stress you went through fighting your own insurance company.
- Punitive damages: This is extra money specifically designed to punish the insurance company for their bad actions and to stop them (and others) from doing it again.
I’ve personally seen cases where people ended up recovering several times their original claim amount, all because of how incredibly badly their insurance company behaved. It’s a simple truth: the worse their conduct, the higher the potential damages you could receive.
Red Flags That Scream “Bad Faith”
Your insurance company isn’t exactly going to send you a memo saying, ‘Hey, we’re acting in bad faith!’ It’s up to you to spot the warning signs. So, let’s talk about the biggest red flags you absolutely need to watch for:
The Silent Treatment
You file your claim, and then… crickets. Seriously, weeks turn into months without a peep from them. When you finally get someone on the phone, all they can say is they’re ‘still investigating.’ But ask them for any specifics – what exactly are they investigating? When will they be done? – and suddenly, they’re all out of answers.
The Denial Without Explanation
Your claim gets denied, but good luck getting a straight answer about why. They won’t tell you what specific part of your policy they’re using to exclude coverage. Instead, you might just get a generic form letter filled with vague, confusing language that explains absolutely nothing.
The Lowball Shuffle
Imagine your house gets $50,000 worth of damage. But then, your insurer offers you a measly $15,000 and acts like they’re doing you a massive favor. If you dare ask how they even got to that number, don’t expect a reasonable explanation. You’ll probably just get silence or more vague responses.
The Moving Goalposts
You send in all the documents they asked for, thinking you’re finally making progress. But then, surprise! They suddenly need something else. It feels like they’re just making up new requirements on the fly, constantly moving the goalposts, all in the hopes that you’ll eventually just throw your hands up and quit.
The Pressure Campaign
They hit you with what they call their ‘final offer’ and basically tell you to take it or leave it, right now. This happens even if you haven’t had nearly enough time to properly think it over and figure out if it’s even remotely fair.
Why You Can’t Go It Alone (Trust Me on This One)
Look, I totally get it. You might be thinking, ‘Hey, I can handle this myself!’ After all, you know exactly what happened, you’ve got your policy, and you’re certainly not stupid. But here’s the real deal: insurance companies aren’t playing fair. They have entire armies of highly trained lawyers and adjusters whose sole mission is to pay out as little as humanly possible. This is their full-time job, day in and day out.
Insurance bad faith law? It’s incredibly complex, like a maze designed by lawyers. There are super specific procedures you have to follow, strict deadlines you absolutely can’t miss, and evidence you need to gather in precisely the right way. Screw up just one step, and you could seriously jeopardize your right to hold them accountable.
On top of all that, insurance companies treat people who have a lawyer very differently than those who try to go it alone. When they realize you’ve got a sharp lawyer in your corner who truly understands bad faith law, suddenly, they tend to become a whole lot more reasonable.
What Makes McCormick & Murphy P.C. Different
Look, I’ll be completely straight with you – not all lawyers are built the same, especially when you’re talking about tricky insurance bad faith cases. You absolutely need someone who genuinely understands this specialized area of law and has a proven track record of actually getting results.
McCormick & Murphy P.C. has been fiercely fighting for Colorado clients since way back in 1995, bringing over 60 years of combined legal experience to the table. They’ve successfully recovered millions of dollars for the people they represent, and believe me, they know exactly how insurance companies tick.
What I really appreciate about their approach is that they don’t just blindly file lawsuits and cross their fingers. They totally get that winning bad faith cases demands super meticulous documentation and a really thorough investigation. They’re experts at digging up and gathering the evidence that doesn’t just prove your claim should be paid, but also clearly shows your insurance company behaved completely unreasonably.
You can find their office right here in Colorado Springs, at 929 W Colorado Ave. They’ve really built their rock-solid reputation on genuinely caring about their clients’ results, not just on racking up fees.
The Documentation Game-Changer
Alright, here’s a little piece of advice that most people don’t fully grasp until it’s unfortunately too late: documentation is absolutely everything in bad faith cases. Seriously, the more detailed records you have, the bulletproof your case becomes.
Start keeping track of everything right now:
- Every single phone call with your insurance company (make sure to jot down the date, time, who you spoke with, and exactly what was discussed).
- All emails and letters – every single one – both those you sent and those you received.
- Plenty of photos of your damage, taken from multiple angles.
- Receipts for any expenses you’ve incurred because of your claim or their delays.
- Names and contact info for any witnesses you might have.
- Detailed records of how the insurance company’s unreasonable delays have impacted your day-to-day life.
I know, I know, it sounds super tedious, but trust me on this: this kind of detailed documentation is often the only thing that makes the difference between winning a successful case and watching one completely fall apart.
Common Mistakes That Can Hurt Your Case
I’ve seen people accidentally damage their own bad faith claims by making these mistakes:
Accepting the First Settlement Offer
Insurance companies, bless their hearts, almost never lead with their best offer. They’re basically testing the waters, trying to see if you’ll just settle for less than you truly deserve. So, don’t let them pressure you into accepting anything too quickly.
Not Reading Your Policy Carefully
Okay, I get it – insurance policies are about as exciting as watching paint dry, and they’re often incredibly confusing. But you really need to buckle down and understand exactly what coverage you actually have. Your insurance company is banking on you not knowing your rights inside and out.
Giving Recorded Statements Without Legal Advice
Insurance adjusters are super skilled at asking seemingly innocent questions that can easily be twisted later to seriously hurt your claim. Be extremely careful about what you say, and honestly, it’s always smart to have a lawyer present before you give any recorded statements.
Waiting Too Long to Take Action
Colorado actually has some pretty strict time limits for filing bad faith claims. So, don’t make the mistake of thinking you have all the time in the world to decide what to do.
What to Expect When You Fight Back
Look, filing a bad faith claim is a whole different ballgame than just filing your original insurance claim. This is serious litigation, and insurance companies definitely take it seriously. They’ll roll out their big guns – we’re talking about highly experienced defense lawyers who specialize in fighting these exact kinds of cases.
The process typically involves:
- A super thorough investigation into exactly how your insurance company handled your original claim.
- Carefully gathering all the necessary evidence of their unreasonable, bad faith conduct.
- Calculating all the damages you’ve suffered – and remember, that’s often way more than just your original claim.
- Tough negotiations with the insurance company’s sharp lawyers.
- Potentially heading to trial if they simply refuse to offer you fair compensation.
The good news, though? Insurance companies usually prefer to settle bad faith cases out of court rather than risk getting hit with a massive jury verdict. When they see you’re serious and have strong, knowledgeable legal representation, they suddenly become a whole lot more motivated to actually resolve things fairly.
Industry Changes That Work in Your Favor
Here’s some genuinely encouraging news: the entire insurance industry is actually being forced to rethink how it handles claims. Those massive verdicts I mentioned earlier aren’t just isolated incidents; they’re part of a much bigger trend that’s clearly making insurance companies very, very nervous.
Many insurers are now:
- Seriously reviewing their claim procedures to try and steer clear of bad faith liability.
- Giving much better training to their adjusters, hopefully leading to fairer interactions.
- Setting up more transparent and clearer communication systems.
- Slowly moving away from those overly aggressive, ‘deny everything’ strategies.
Now, this absolutely doesn’t mean bad faith has magically vanished – far from it. But it does mean insurance companies are much, much more aware that their actions have real, tangible consequences.
Five Steps to Protect Yourself Right Now
Whether you’re currently dealing with an insurance claim or just want to be prepared, here are five things you can do to protect yourself:
1. Read Your Policy Before You Need It
Seriously, don’t wait until you’re in the middle of a stressful claim to try and figure out your coverage. Crack open your policy when you first get it, and if anything’s unclear, don’t hesitate to ask questions.
2. Document Everything from Day One
The moment you have a claim, start a meticulous paper trail. This means documenting the initial damage, every single communication with your insurer (calls, emails, letters), and any expenses you incur because of their actions or delays.
3. Know Your Rights Under Colorado Law
Take a little time to get familiar with Colorado’s specific insurance bad faith laws. Knowing your rights makes you a much more informed consumer and helps you spot immediately when your insurance company is definitely crossing the line.
4. Don’t Accept Unreasonable Delays
Your insurance company is legally required to investigate and respond to claims within reasonable timeframes. If weeks are turning into months with no real progress, don’t just sit there! Start asking very pointed questions about why things are dragging on.
5. Get Legal Advice Early
You absolutely don’t have to wait until your claim is officially denied to talk to a lawyer. If you’re spotting any of those red flags we discussed, even just getting a quick consultation can help you understand your options and protect your rights before things get worse.
When to Call for Backup
You should seriously consider contacting a bad faith lawyer if:
- Your insurance company has been sitting on your claim for months, offering no real explanation.
- They denied your claim but flat-out refuse to give you a clear, specific reason why.
- Their settlement offer is ridiculously low, nowhere near what your actual damages are worth.
- They’re constantly demanding excessive, pointless documentation or making absolutely unreasonable requests.
- You feel like they’re strong-arming you, trying to pressure you into settling for far less than you truly deserve.
- Their adjuster has been rude, dismissive, or just plain unprofessional in their dealings with you.
And here’s a really important point: most bad faith lawyers work on a contingency basis. That means you literally don’t pay them a dime unless they win your case! So, there’s really no risk or downside to at least having a free, confidential conversation about what’s going on.
The Bottom Line
So, here’s the bottom line: insurance bad faith is unfortunately way more common than most people realize. But you absolutely don’t have to just grin and bear it. Colorado law offers some really strong protections for policyholders, and as we’ve seen, courts are more and more willing to hold insurance companies truly accountable for their unreasonable conduct.
The real trick is spotting bad faith when it happens and taking action before it’s too late. Seriously, don’t let your insurance company walk all over you. You’ve been paying for that coverage, sometimes for years, and you absolutely deserve to be treated fairly when you need it most.
If you’re currently dealing with an insurance company that’s giving you the classic runaround, please don’t wait another minute to get help. Reach out to McCormick & Murphy P.C. right away! You can call them at (719)-389-0400 or shoot an email to [email protected]. With their decades of experience fiercely fighting for Colorado clients, they can totally help you understand your rights and figure out the best options for you.
Think about it: Your insurance company has a whole team of lawyers looking out for their bottom line. Shouldn’t you have someone just as sharp looking out for yours?
