What’s the First Step To Take if I Suspect Insurance Is Bad Faith?

If you’re dealing with an insurance claim in Colorado Springs and something feels off—maybe your insurer is dodging your calls, dragging out the process, or denying a claim that clearly should be covered—you could be facing what’s known as insurance bad faith. In these first step insurance bad faith scenarios, the most important thing you can do is educate yourself and take strategic action early. Don’t assume it’s just red tape or a clerical error. Sometimes, insurers use these intentional tactics to reduce payouts or pressure policyholders into walking away. Understanding your rights and knowing how to respond can make all the difference. At VandenBout Law, we help Colorado Springs clients stand up to insurance companies that don’t play fair and ensure our clients are treated with the honesty and respect they deserve.

What Is Insurance Bad Faith?

When an insurance company fails to meet its obligations or tries to sidestep paying a legitimate claim without a valid reason, it may be operating in bad faith. Bad faith isn’t just a refusal to pay—it’s a deliberate breach of the insurer’s duty to handle claims fairly, honestly, and promptly. Every insurance contract has an implied agreement that both parties will act in good faith, and when that’s broken, legal accountability can follow. Policyholders in Colorado Springs who believe they’re experiencing these tactics have the right to pursue action against the insurer.

When an Insurer Fails to Act in Good Faith

An insurer acts in bad faith when it prioritizes profit over policyholder protection. This can include deliberately undervaluing claims, ignoring communication, or denying coverage without investigating the situation properly. These are not simple errors—they are potential violations of consumer protection laws.

How It Impacts Your Rights as a Policyholder

When an insurer acts in bad faith, your rights as a policyholder are directly threatened. You may be entitled to compensation beyond the original claim amount, including punitive damages in some cases. Colorado law protects consumers through regulations such as House Bill 20-1076, which prohibits deceptive insurance practices.

Common Signs of Bad Faith by Insurance Companies

Bad faith doesn’t always come with flashing red lights. Often, it begins with small, subtle moves by the insurer that suggest they’re avoiding responsibility.

Delays, Denials, and Misleading Information

Consistent delays, unclear explanations, or outright misinformation are strong signs of bad faith. If your insurer keeps asking for the same documents over and over or keeps changing their reason for denying your claim, it may not be an accident.

When to Start Documenting Everything

Start documenting the moment something doesn’t feel right. Keep a detailed log of all communications—emails, phone calls, letters. Save every piece of correspondence. This record can become critical evidence if you later decide to file a bad-faith claim.

First Step to Take if You Suspect Bad Faith

Once you feel your claim is mishandled, you must make strategic decisions quickly. Don’t wait for the situation to spiral.

Gather Documentation and Policy Details

Your first move is to gather every document related to your insurance policy. This includes the policy itself, any correspondence with the insurer, notes from phone calls, and claim-related paperwork. The more organized you are, the stronger your legal footing will be.

Avoid Direct Confrontation – Seek Legal Advice Early

Avoid arguing directly with your insurer about bad faith. While it might be tempting to push back, it’s easy to say something that could be used against you later. Instead, let your legal team handle the heavy lifting. A qualified attorney can also walk you through how to file a bad faith insurance claim, ensuring your case is built on solid legal ground from the start.

Why You Should Contact a Lawyer First

The insurance company has had attorneys on its side since day one. You should, too.

Protecting Your Rights From the Start

Legal representation early on helps avoid missteps that could weaken your case later. Lawyers understand how to communicate with insurance adjusters and preserve key evidence.

How VandenBout Law Can Help You Take Action

At VandenBout Law, we work with Colorado Springs clients who are frustrated and exhausted from dealing with bad-faith insurers. Our team fights to hold insurance companies accountable and recover what you’re owed. We step in early to build a case that’s detailed, compliant, and hard to ignore. If you’re dealing with a first-step insurance bad-faith situation, we’re ready to help.

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Speak With a Bad Faith Insurance Attorney Now

You don’t have to face an insurance company alone. Contact our Colorado Springs office to schedule a consultation and get clear, experienced guidance on what to do next. VandenBout Law is here to defend your rights and take action on your behalf—starting with the very first step.

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