CO Auto Insurers Cannot Delay Payment of Covered Benefits

Disputes often arise between insureds and their auto insurance companies regarding what is owed under Uninsured/Underinsured Motorist claims.  Insurers frequently attempt to pay nothing under these claims until a final agreement is reached regarding the total value of an insured’s claim.  This week, the Colorado Supreme Court upheld a ruling by the Court of Appeals that under C.R.S. § 10-3-1115, “insurers have a duty not to unreasonably delay or deny payment of covered benefits, even though other components of an insured’s claim may still be reasonably in dispute.”[1]

In Colorado, drivers need only carry $25,000 per person (not to exceed $50,000 per incident) in Bodily Injury (BI) coverage.  BI coverage applies to injury claims arising from a driver inflicting harm on other people.  Unfortunately, negligent drivers who carry only the minimal BI limits are unlikely to have adequate insurance or other resources needed to fully compensate a seriously injured claimant.  In fact, there are so many uninsured and underinsured motorists on the roads that many years ago, our state legislators created a law requiring auto insurance companies to offer consumers UM/UIM coverage.  UM/UIM coverage applies when another driver has inflicted bodily harm on you, a family member, or a passenger in your vehicle. 

UM/UIM claims cover the bodily injury losses caused by a hit-and run driver, a driver without insurance, or a driver of an underinsured vehicle.  The types of damages you may recover under such a claim include past/future loss-related medical bills, mileage, out-of-pocket expenses related to the injury/treatment, lost wages/earnings and diminished earning capacity, physical impairment, disfigurement, and past/future pain and suffering. (In the case of an underinsured driver an injury claimant may only recover the amount of her damages which are in excess of the available liability limits).

In the case of State Farm v. Fisher[2], Fisher was insured by State Farm and had $60,000 in medical bills caused by the negligence of an underinsured driver.  Fisher sought recovery of UIM benefits under his State Farm policy, including for loss-related medical bills.  When State Farm paid nothing, Fisher sued, alleging State Farm had unreasonably delayed paying his medical expenses because State Farm had previously agreed that the bills were related to the car crash.  State Farm argued that it was under no obligation to pay any benefits under the UIM claim, including loss-related medical bills, because it disputed the remainder of Fisher’s claim.  A jury found that in failing to pay the portion of the benefits owed which were undisputed (medical bills in Fisher’s case) State Farm violated the Colorado Law  C.R.S. §10-3-1115 which provides that an insurer “shall not unreasonably delay or deny payment of a claim for benefits owed to or on behalf of any first-party [insured] claimant.”  State Farm appealed and the verdict was upheld by the Colorado Court of Appeals and affirmed by the Colorado Supreme Court.

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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