When a client has a legitimate personal injury claim, but their own insurance company wrongfully attempts to avoid paying that claim, the insurance company has not only breached its contract with its insured, but the insurance company has acted in “bad faith.” The term bad faith also covers the refusal of an insurance company to process its policyholder’s claim in a timely manner, the failure to investigate claims, the failure to disclose the limitations of a policy before purchase, or the demand that the client go to unreasonable lengths to prove a loss.
We typically see bad faith cases arise when an insured seeks Uninsured or Underinsured Motorist coverage after a serious motor vehicle accident and where the underlying person who causes the accident does not have insurance or does not have adequate insurance.
If your insurance company acts in bad faith, you can seek to recover your losses in the form of a lawsuit that focuses on recovering not only amounts owed to you under the insurance policy from the underlying personal injury claim (for example, past and future economic and non-economic damages and losses), but also extracontractual damages caused by the insurance company’s unreasonable actions. In Colorado, statutory damages are also available for an insurance company’s unreasonable actions in delaying or denying payment.
How to Determine Damages
When it comes to determining damages, there is no simple equation that fits all cases. How much your bad faith claim is worth will depend on several aspects unique to your case.
With regard to benefits owed under the policy, in a personal injury suit a person can typically recover economic damages, which can include loss of income and earning capacity, past and future medical bills, loss of property, or anything related to financial loss. A person can also recover noneconomic damages, which include pain and suffering, emotional distress, and loss of enjoyment of life. Colorado also allows recovery for permanent physical impairment and disfigurement. Those recoverable damages can be included in a bad faith case against the insurance company as part of the recoverable benefits under the insurance policy.
Beyond seeking damages for the benefits owned under the insurance policy, damages for the insurance company’s bad faith actions may be sought. In addition to the benefits owed, bad faith damages can include economic and non-economic losses and damages that go beyond the underlying benefits. Those are called extracontractual damages. An experienced bad faith insurance lawyer can evaluate your claim to determine if you can recover these types of damages.
In addition, Colorado’s statutory laws provide a very strong incentive for insurance companies to pay claims. Colorado’s law provides that policyholders may recover not only the total amount of benefits wrongly delayed or denied, but they can recover — in addition — two times the covered benefits. Wronged clients can also get reimbursed for attorney fees and other costs under the statute.
Insurance companies can also be liable for exemplary/punitive damages if their conduct is deemed to be willful and wanton.
As you can see, insurance companies can be liable for significant damages beyond whatever policy benefits they may have owed but wrongfully failed to pay. Unfortunately, this does not stop insurance companies from delaying or denying payment of insurance benefits to their insureds.
Contact Whalen Injury Lawyers
What damages you may be entitled to in a bad faith case depends on many factors. If you suspect that your insurance company is treating you and your legitimate claim unfairly, contact the lawyers at Whalen Injury Lawyers. Our lawyers are experienced in dealing with insurance companies and bad faith insurance claims and if you have a claim that has been delayed or denied, we can help you seek recovery of damages against your insurance company.
