Denver Bad Faith Insurance Lawyer
When insurance companies fail to honor their commitments, the consequences go far beyond frustration—they can result in serious financial and emotional harm. Insurance is supposed to provide peace of mind, offering a safety net when you need it most. But when valid claims are wrongfully denied or delayed without a legitimate reason, it can leave individuals and families struggling to recover, both financially and emotionally. These situations can cause mounting stress, unexpected expenses, and uncertainty about the future.
If you’ve experienced an unfair denial, unexplained delays, or suspect your insurer is acting in bad faith, it’s important to know you have rights. Consulting with a professional team, like ours at VandenBout Law, can make all the difference. We specialize in protecting policyholders and holding insurance companies accountable for their bad-faith actions. From wrongful claim denials to lowball settlement offers, we understand the tactics insurers often use to avoid paying what you’re owed.
As your trusted Denver bad faith insurance lawyer, we’ll work tirelessly to fight for the compensation, justice, and resolution you deserve. Our goal is to help you navigate the complexities of insurance disputes while providing compassionate and expert guidance every step of the way.
What Is Insurance Bad Faith?
Insurance bad faith occurs when an insurer acts unfairly or dishonestly toward its policyholders, failing to honor their obligations under the policy. It often leaves policyholders feeling overwhelmed—facing unexpected bills, delays, and deep uncertainty about how to move forward. Understanding your rights, recognizing the signs of bad faith, and taking appropriate action is crucial to protecting yourself, seeking compensation, and ensuring justice against unethical insurance practices.
Definition and Why It Matters in Colorado
As mentioned before, bad faith in insurance occurs when your insurer fails to handle your claim honestly or fairly. In Colorado, the law demands insurers treat policyholders with integrity. When they don’t, they can be held accountable. This applies to all types of insurance policies—from auto and homeowners to health and commercial coverage. The law requires insurance companies to investigate, evaluate, and pay claims with reasonable diligence. When they don’t, the policyholder often ends up footing the bill, facing unexpected financial burdens. Colorado’s laws are designed to protect policyholders from unfair treatment and ensure claims are handled promptly.
The Colorado Division of Insurance enforces these obligations and lays down specific consequences for companies that cross the line. Bad faith doesn’t just mean a mistake—it means a pattern of disregard or deliberate mishandling, potentially causing significant financial and emotional stress for policyholders.
To put it simply, if you’ve done your part—paid your premiums, filed your claim properly, submitted all requested documents—and your insurer drags its feet or gives you a runaround, that’s not just frustrating. It could be unlawful, and you have the right to hold them accountable through legal action or by filing a complaint.
First-Party vs. Third-Party Claims
There are two distinct paths to consider in these cases, and understanding the difference between them is absolutely crucial for making informed decisions. Each path comes with its own challenges and opportunities, which can significantly impact the outcome depending on the chosen direction.
First-party claims
First-party claims involve situations where your insurance company fails to pay you what you’re owed under your own policy. For example, imagine a hailstorm damages your roof, and despite having coverage, your insurer avoids paying for the repairs or offers an unreasonably low settlement. This type of bad faith directly violates the agreement you entered into when purchasing the policy. It can delay necessary repairs, cause financial strain, and leave policyholders feeling powerless against large insurance companies.
Third-party claims
Third-party claims occur when your insurance company fails to defend or fairly settle a claim brought against you by someone else. For example, if someone sues you for damages and your insurer is obligated to defend or settle the claim—but fails to do so or handles it negligently—they may be breaching their duty to you as a policyholder. This can leave you vulnerable, both financially and legally, and could potentially lead to significant out-of-pocket expenses.
This distinction matters because it guides the type of damages you can pursue and highlights the specific ways the insurer may have acted in bad faith. Some cases can even involve both first-party and third-party bad faith claims, requiring a deeper and more careful review to fully understand the scope of the insurer’s misconduct and how to hold them accountable. Knowing whether your situation involves a first-party or third-party claim—or potentially both—allows us to craft an effective strategy to fight back, ensuring your rights are protected and that the insurer fulfills their obligations to you.
Common Examples of Bad Faith Insurance Tactics
Insurance companies may engage in various bad faith tactics to delay or deny legitimate claims, leaving policyholders in difficult situations. Some common examples include refusing to investigate claims properly, misrepresenting policy terms, offering unreasonably low settlements, delaying payment without justification, or failing to communicate updates promptly. These practices can cause significant financial and emotional stress for policyholders, forcing them to fight for the compensation they are entitled to.
Denied Claims Without Valid Reason
Insurers sometimes deny claims without providing a clear explanation—a serious red flag that can leave policyholders feeling frustrated and helpless. In Colorado, failing to justify a denial isn’t just unethical; it can violate the law. Common tactics include referencing vague policy exclusions or shifting blame onto the policyholder, creating confusion and delaying rightful payouts.
These practices not only lack integrity but may also be illegal—and they’re far more common than many realize. In some instances, an insurer might even misrepresent your coverage or claim that an event isn’t covered when, in fact, it is. These deceptive statements reflect a broader pattern of dishonest claims practices that courts have increasingly recognized and condemned. Understanding your rights is crucial in these situations.
Lowball Offers or Delayed Payments
Other times, insurers don’t deny your claim—they just drag their feet or send an unreasonably low offer. That’s another form of bad faith.
These tactics may include repeated paperwork requests, unnecessary “internal reviews,” or simply avoiding your calls. The goal? Wear you down until you accept less than you’re owed.
Delayed payments can lead to deeper financial issues, especially when medical bills or urgent property repairs are involved. In extreme cases, policyholders may be forced to take out loans or sell assets just to stay afloat. None of this is fair—and the law agrees.
Failure to Investigate or Defend Properly
When an insurer doesn’t bother gathering the facts—or worse, refuses to defend you in a liability claim—it’s shirking its legal responsibilities.
A proper investigation means reviewing all evidence, communicating with relevant parties, and applying the policy fairly. If corners are cut, policyholders often pay the price.
We’ve seen cases where an insurer decided a claim was invalid before reviewing a single document. That’s not a judgment call—it’s a breach of duty. When your insurer won’t even take the time to understand your loss, they’ve already failed you.
Your Rights Under Colorado’s Bad Faith Laws
Under Colorado law, insurance companies have a duty to act in good faith when handling claims. If an insurer unreasonably delays or denies benefits without a valid basis, they may be held accountable for acting in bad faith. This includes situations where an insurer fails to investigate a claim, disregards evidence properly, or undervalues a policyholder’s loss.
What the Law Requires From Insurance Companies
Colorado law takes insurance fairness seriously, thanks to HB20-1076. This legislation strengthens protections for policyholders and holds insurers accountable for unfair practices. It mandates timely communication, fair investigations, and reasonable resolutions for claims. Insurers can face treble damages, attorney fees, and court costs if they deny claims in bad faith or breach valid policies. It also prevents insurers from exploiting loopholes or engaging in deceptive tactics to avoid their responsibilities. Unilateral policy changes or cancellations are deemed deceptive practices under this law.
Key provisions include:
- Hearings within 60 days upon request.
- Treble damages and attorney fees for bad faith claim denials.
- Findings from administrative hearings are admissible in civil cases.
- Insurers cannot use summary judgment tactics in jury trials for claims.
HB20-1076 puts people over profits, ensuring policyholders get the fair treatment they deserve and holding insurers to higher standards of accountability and fairness.
Statute of Limitations in Colorado
In Colorado, you usually have two years from the bad faith incident to take legal action. It’s not much time—especially when you’re trying to recover from a loss. That clock starts ticking the moment the insurer commits the wrongful act. If you miss that window, you may lose your right to pursue damages. It’s one reason why quick legal guidance can make a huge difference.
Acting quickly is also crucial for practical reasons: memories fade, documents get lost, and witnesses move away. The sooner you act, the better your chances of building a strong case. Legal professionals can help gather evidence, interview witnesses, and ensure all deadlines are met. Delays can weaken your case, making it harder to secure the compensation you deserve. A prompt legal response not only protects your rights but also ensures that your case is backed by solid evidence, giving you the best chance to hold the insurer accountable.
Legal Grounds to File a Claim
To prove bad faith, policyholders must show that the insurer acted unreasonably in handling their claim—deviating from what a reasonable insurer would have done in similar circumstances. Unlike a simple breach of contract, which only requires proving the insurer failed to pay a covered claim, bad faith involves showing the insurer’s actions were unjustified and lacked a reasonable basis.
Claimants must also prove the insurer knew or recklessly disregarded the fact that its conduct was unreasonable. This often involves examining internal communications, claims handling procedures, and investigative efforts. For example, if a denial was based on an incomplete or biased investigation, it could be evidence of bad faith. Recognizing these patterns of unreasonable behavior is critical to building a strong case.
Additionally, policyholders may need to provide expert testimony or reports to demonstrate industry standards and how the insurer’s behavior fell short. Courts will often look at whether the insurer followed best practices for timely investigations and fair evaluations of claims. Bad faith cases aim to hold insurers accountable and ensure policyholders are treated fairly, especially in times when they rely on coverage the most.
What Damages Can You Recover in a Bad Faith Case?
In a bad faith insurance case, the damages a policyholder can recover generally fall into the following categories: these include compensation for the original insurance claim that was wrongfully denied, additional financial losses caused by the insurer’s actions, and, in some cases, punitive damages aimed at penalizing the insurer for their misconduct. Depending on the specifics of the case, emotional distress, and attorney’s fees may also be recoverable, offering a more comprehensive remedy for the harm caused.
Economic Damages (Financial Losses)
Bad faith hurts your wallet. You may be able to recover:
- Benefits owed under the original policy
- Additional out-of-pocket costs caused by delays
- Lost income due to denied coverage
- Financial losses tied to property or business interruption
A simple delay in payment can snowball into credit damage, unpaid bills, and mounting stress. These financial ripples are real—and recoverable. Bad faith insurance practices don’t just impact your finances—they affect your peace of mind. Add to that the impact of canceled contracts, missed work, depleted savings, and the emotional toll, and it becomes clear these aren’t just numbers on a spreadsheet. These are real-life consequences that ripple across every area of your life, leaving a lasting impact.
Emotional Distress and Punitive Damages
Insurance mistreatment impacts more than just your finances—it disrupts lives. The anxiety, stress, and sleepless nights it causes are very real, and Colorado courts acknowledge these effects, treating them with the seriousness they deserve. In cases where an insurer’s actions are especially reckless or deliberate, you may also be eligible for punitive damages. Unlike standard compensation, punitive damages serve a greater purpose: to punish misconduct and deter similar behavior in the future. The more egregious the insurer’s actions, the stronger the case for these damages. These awards ensure companies are held to higher standards, protecting consumers from future harm. While punitive awards are uncommon, when granted, they send a powerful message, holding insurers accountable for unethical behavior and reinforcing the importance of fairness and integrity in insurance practices.
Legal Costs and Attorney’s Fees
When a policyholder wins a bad faith case, Colorado law often allows recovery of legal fees. That means you don’t have to take on a powerful insurer alone—or worry that legal costs will wipe out any payout you recover. Leveling the playing field is part of the process, so you can focus on your recovery without financial stress.
Courts recognize that going up against a billion-dollar insurance company shouldn’t be a game of financial endurance. Recovering legal costs helps ensure that the scales of justice stay balanced, giving policyholders the confidence and resources they need to fight for what’s right. This protection is critical, as insurance companies often have deep pockets and teams of lawyers to defend their interests. For policyholders, knowing that they can recover legal fees provides both peace of mind and the ability to pursue justice without fear of financial ruin.
How a Denver Bad Faith Insurance Lawyer Can Help You
A Denver bad faith insurance lawyer can help when an insurance company unfairly delays, underpays, or denies your claim. They will work to hold insurers accountable and ensure you get the compensation you deserve, whether through negotiation or litigation. With their expertise, they can investigate your claim, gather evidence, and build a strong case, alleviating the stress of dealing with unfair practices. Additionally, they understand the tactics insurance companies use and will fight to protect your rights, ensuring you receive fair treatment and the financial support you’re entitled to.
Gathering Evidence and Proving Bad Faith
These cases rely on proof—emails, policy language, documentation, and records of how the claim was handled. We dig deep to uncover the paper trail, ensuring no detail is missed. We’ll review every denial letter, follow-up request, and internal justification used to stonewall you. This documentation forms the backbone of your case and reinforces your position.
Sometimes, we even uncover internal memos, call logs, or emails showing that the insurer knew their position wasn’t defensible—but tried it anyway, hoping you’d give up. That kind of discovery is powerful and can make a huge difference in the courtroom, helping to hold insurers accountable for their actions.
Negotiating With the Insurance Company
Insurers often know which policyholders will fold and which ones are prepared to stand their ground. We make it clear we’re here to stand our ground and advocate for you every step of the way. That starts with a demand package backed by law, evidence, and compelling narratives. We apply pressure where it counts—holding the insurer accountable without dragging the process out longer than necessary. Communication is key, and we keep you informed throughout the process so you know what to expect. A fair resolution is our goal, but we don’t let the insurer off the hook. We use every tool at our disposal—from mediation to formal arbitration—to get you the justice and compensation you truly deserve.
Taking the Case to Trial If Needed
Some insurers refuse to settle fairly. If we need to go to court, we’re ready—because you deserve more than delays and excuses. You deserve fair treatment and a chance to move forward with confidence. We don’t posture. We prepare. That includes witness preparation, expert testimony, and airtight legal argumentation built on Colorado statutes and precedent, ensuring your case is strong from every angle.
We leave no stone unturned, gathering evidence and building a strategy that gives you the best chance of success. We also take care to humanize your story in front of a jury, helping them understand the real impact this case has on your life. This isn’t just another file to us—it’s your life, your livelihood, and your right to fair treatment. You can trust us to stand by you every step of the way.
Speak With a Denver Bad Faith Insurance Lawyer Today
If you suspect that your insurance company has acted in bad faith, don’t wait to seek legal advice. The sooner you take action, the better your chances of gathering the evidence needed to prove your case. Our team of bad-faith insurance attorneys in Denver understands the tactics that insurance companies use to deny, delay, or underpay legitimate claims, and we are prepared to fight for the compensation you deserve.
Free Consultation — Let’s Review Your Case
Think your insurer crossed a line? Let’s talk about it. We’ll review the details, walk you through your rights, and explain the next steps—all at no cost. No one deserves to feel powerless against their insurance company. This isn’t just about recovering money. It’s about accountability, fairness, and ensuring you’re treated with respect and dignity. We’re here to stand by your side, helping you understand your options and take action if needed. Whether it’s a denied claim, an unfair settlement, or payment delays, we’ll guide you through it. Our team is dedicated to giving you the support, clarity, and confidence you deserve. Let’s work together to make things right.
Start Your Claim Before It’s Too Late
Time is limited—every day counts when filing a bad faith insurance claim. The sooner you act, the stronger your case can be. While you focus on moving forward, let VandenBout Law take care of the legal side.
Call us today at (720) 713-3415 to speak with an experienced Denver bad faith insurance lawyer who knows how to challenge unfair practices and fight for the outcome you deserve. You don’t have to take on your insurance company alone. We’re here to guide you through the process with clarity, confidence, and the support you need.
Time matters. Truth matters. And so does having the right team in your corner when it really counts.