Colorado Insurer Cannot Escape Accountability in Court Through Fine Print

Though you may not realize it, almost every insurance agreement to which you are a party is governed by a policy contract.  Insurers get to draft the contracts and consumers are bound by whatever provisions are contained therein except when those provisions violate the law or are contrary to public policy.  In a recent Court of Appeals case, the Court held that Freedom Life Insurance Company could not draft a contract in such a way as to shield itself from a Colorado Law which gives consumers their day in court when an insurance company unreasonably delays or denies a claim.[1] 

Every day, businesses are attempting to erode consumers’ rights by placing mandatory arbitration clauses in contracts.  Insurance companies are among those businesses.  In the case of Meardon v. Freedom Life Insurance Company, the Colorado Court of Appeals held that neither the Federal Arbitration Act nor the policy provision requiring mandatory and binding arbitration barred Ms. Meardon from having her claim for unreasonably denied insurance benefits heard in a Colorado court of law. 

The law that allowed Ms. Meardon to seek recourse in a court of law is Colorado Revised Statute 10-3-1116(3), which states that “[a]n insurance policy, insurance contract, or plan that is issued in this state shall provide that a person who claims health, life, or disability benefits, whose claim has been denied in whole or in part, and who has exhausted his or her administrative remedies shall be entitled to have his or her claim reviewed de novo in any court with jurisdiction and to a trial by jury.”

It’s important to understand that not all states have laws which afford such remedies and insurance companies spend untold amounts of money each year lobbying to enact laws which further restrict consumers’ rights in Colorado and elsewhere.  Do you appreciate that you live in a state that affords these types of protections to consumers under the law?  If so, vote in and vote to keep in legislators who support these types of laws and thank the Plaintiff’s Personal Injury Attorneys who fight to enforce the laws that protect consumers and to hold insurance companies accountable when they don’t do the right thing. 

Do you have an insurance claim that was unreasonably delayed or denied?  Contact the Colorado Springs Injury Attorneys at Rosenbaum & Wootton by calling 719.634.0102 or click on this link to schedule a FREE INITIAL CONSULTATION.

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