We had a disconnected pipe flood the main floor of our condo. We immediately opened a claim with our insurance and had a mitigation company come in to clean up the water. Now our insurance company says that the mitigation company charged too much and they are only paying about 25% of that bill, leaving us to pay the rest, which is sizable. We don’t know what recourse we have.

Unfortunately this situation is all to common. The good news is that you have legal rights against your insurance company. Colorado bad faith law allows policyholders to recover not only the amount of benefits wrongly withheld or denied but also double their damages and get reimbursed for attorney fees and other costs.

When an insurance company attempts to renege on its obligations - including underpaying claims - it acts in bad faith. This means that if your insurer unreasonably denies your claim, delays investigating or processing your claim, or refuses to defend and indemnify you against claims by others, they could be violating Colorado law. The key word is "unreasonably." Insurers have a responsibility to verify the legitimacy of policyholder claims promptly.

To establish a bad faith claim, you must prove that the insurer’s actions were unreasonable. Documenting every step of the claims process, keeping logs of all interactions, and retaining written denials.

For a complete guide, please see our article "Understanding Insurance Bad Faith: A Comprehensive Guide for Colorado Policyholders" and call us when you are ready to speak with one of our insurance bad faith attorneys at (303) 688-0944.