How Do I Know When to File a Bad Faith Claim Against an Insurance Company?

Filing an insurance claim should bring peace of mind—not confusion, roadblocks, or unjustified denials. If you’ve experienced delays, vague responses, or a refusal to pay what you’re owed, you could face a bad faith insurance claim. This legal remedy empowers policyholders to fight back when insurers act dishonestly or fail to uphold their obligations. At VandenBout Law, we’ve seen firsthand how Colorado Springs residents can be left in stressful situations without proper recourse. We’re committed to holding insurance companies accountable and ensuring every client receives timely, fair treatment. Whether your claim involves home damage, medical bills, or auto coverage, we’re here to help you understand your rights and take the next step toward justice.

“At VandenBout Law, we focus on helping policyholders in New Mexico navigate disputes involving insurance bad faith. Our practice exclusively represents individuals and families—not insurance companies. ”

Lawrence VandenBout

Trial Lawyer

What Is a Bad Faith Insurance Claim?

A bad faith insurance claim is a legal action you can take when your insurer fails to uphold their contractual obligations in a dishonest or unfair way. Insurance companies are legally and ethically responsible for acting in good faith when handling your claim. You may be entitled to additional damages on top of your original claim when they don’t.

How Insurance Companies Are Supposed to Act

Under Colorado law, insurance providers must treat claimants fairly, communicate promptly, and pay valid claims without delay. According to Legal Clarity, insurers must evaluate each claim objectively and fulfill their policy obligations based on the case’s merits. They expose themselves to legal consequences when they deviate from this duty.

When an Insurer Crosses the Line

When an insurer acts unreasonably, dishonestly, or delays payment without justification, it may be considered bad faith. While insurance companies are allowed to investigate and deny claims when justified, they cannot manipulate facts, ignore evidence, or stonewall the process.

Signs You May Have a Valid Bad Faith Insurance Claim

Spotting bad faith behavior isn’t always easy, especially when the insurer’s responses are vague or confusing. However, some red flags are common.

Unreasonable Delays or Denials

If your insurer takes weeks or months to respond—or denies your claim without proper explanation—it may indicate bad faith. Delaying payment or decision-making beyond reasonable timeframes violates Colorado’s unfair claims practices statutes. According to Money Mentor, these tactics are common indicators of dishonest behavior.

Misrepresentation of Policy Terms

If an adjuster misquotes your policy, claims you aren’t covered for something that clearly is, or provides misleading information about your rights, that’s a major warning sign. Misrepresenting the terms of your policy may give rise to a bad-faith action.

Lack of Proper Investigation

Every valid claim deserves a proper investigation. If your insurer fails to conduct interviews, inspect the damage, or review your evidence in good faith, that negligence could support a claim. Skipping or rushing investigations to justify a denial is not just unethical—it’s illegal. Understanding what’s the first step to take if you suspect insurance is bad faith can help you act quickly and preserve key evidence before it’s lost.

Do I Have Grounds to Sue for Bad Faith?

Bringing a bad faith claim requires more than just frustration—it requires evidence, and your case must meet certain legal standards.

Legal Criteria You Must Meet

To succeed in Colorado, you’ll need to show that:

• You had a valid insurance policy
• You submitted a legitimate claim
• The insurer unreasonably delayed or denied the claim without a valid basis
• You suffered damages as a result

Colorado Revised Statutes C.R.S. §10-3-1115 and §10-3-1116 govern these claims and allow penalties and attorney fees when the insurance company is found liable.

Evidence That Can Support Your Case

Documents matter. Save every communication, claim form, denial letter, and timeline of events. Screenshots of emails, text messages, and phone records can also help. Photos of damage and expert opinions (like repair estimates) add weight to your claim.

Let VandenBout Law Help You Take Action

When you’re facing delays or unfair treatment by your insurer in Colorado Springs, you don’t have to handle it alone. VandenBout Law brings decades of litigation experience and a personalized approach to every bad-faith insurance case we handle.

Talk to a Bad Faith Insurance Lawyer Today

If you believe your insurance company has acted in bad faith, don’t wait. Strict timelines apply, and the earlier you act, the better your chance of recovering full compensation. Our legal team is ready to evaluate your case, explain your rights, and pursue justice. 

Not sure where to start? Learn how to find the best bad faith insurance lawyer so you can choose someone with the right experience to take on your case confidently.

Free Consultation – No Win, No Fee

We offer free consultations and operate on a contingency fee basis, which means you don’t pay unless we win your case. Call us today to speak directly with a bad-faith insurance attorney in Colorado Springs. Let’s make sure your insurer plays fair.

Lawrence VandenBout

Mr. VandenBout has successfully tried multiple cases, he understands that many times the most efficient and effective resolution to a legal dispute occurs outside the courtroom and through the process of mediation. He has been successful in negotiating many favorable settlements for his clients. Mr. VandenBout also utilizes his experience to counsel and assist clients in developing strategies for minimizing the risk of becoming involved in potential legal disputes in the future.

Years of experience: Over 11 years
Recognition: Rising Star 2021, 2022, 2023 & 2024.
Location: Denver, CO