Yes, if an insurer unreasonably denies, delays, or lowballs a valid claim, Colorado law allows a separate bad-faith claim against them, on top of whatever your original claim was worth. Under C.R.S. § 10-3-1116, a first-party claimant whose benefits were unreasonably delayed or denied can recover reasonable attorney fees and court costs, plus two times the covered benefit — on top of, and separate from, damages for breach of the insurance contract itself.
What actually counts as bad faith
Simply disagreeing with your claim’s value isn’t bad faith. It becomes bad faith when the insurer ignores evidence, fails to investigate properly, or strings you along without a legitimate reason. That distinction is exactly why these cases need a real file review, not a gut feeling.
An insurer can’t hold your whole claim hostage
In State Farm v. Fisher, 2018 CO 39, the Colorado Supreme Court held that an insurer can’t refuse to pay the undisputed part of your claim — like your medical bills — just because it’s still fighting you over other amounts, like lost wages. State Farm had conceded a driver’s $61,000 in medical bills were legitimate but withheld payment until his entire underinsured-motorist claim was resolved. The Court ruled that’s still an unreasonable delay under C.R.S. § 10-3-1115, and the driver was awarded the policy limit plus double his medical expenses under the penalty provision in § 10-3-1116. The takeaway: an insurer has to pay what it agrees you’re owed, even while the rest of the claim is still being negotiated.
What to do next
If this is where you are right now, call Mile High Legal at (720) 853-5779 for a free consultation. We handle Colorado car accident and injury claims on contingency, meaning you pay nothing upfront and nothing at all unless we recover money for you.
