Bad Faith: Insurers Must Pay Indisputable Benefits

Posted by on Sep 10, 2015 in Blog | 0 comments

Bad Faith: Insurers Must Pay Indisputable Benefits

The business of insurance is to collect premiums and not pay claims. Insurance companies do not make money by paying claims. An insurance company makes money by delaying payment on claims until the delay becomes unreasonable. If the delay becomes unreasonable, this is bad faith. Colorado law allows the insured to recover twice the covered benefit, plus reasonable attorney fees and costs.

One tactic that an insurance company uses to delay benefit payments is to deny one portion of the claim to delay paying the whole claim. Now, this is also bad faith. In Fisher v. State Farm Mutual Automobile Insurance Company, the Colorado Court of Appeals held that an insurance company cannot delay paying a claim until the total claim is resolved. Instead, the insurance company must pay the amount that is not subject to a reasonable dispute. Thus, if an injured person claims $100,000.00 in damages, and the insurance company cannot reasonably dispute $20,000.00 of damages, the insurance company cannot delay payment of the $20,000.00 because the insurance company disputes the other $80,000.00. If it does, it commits bad faith.

Insurance companies have armies of lawyers to defend them. Consumers have Dan Vedra and Ahson Wali to fight for their rights.

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