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INSURANCE CLAIMS AND DENIALS
There were several changes to the automobile insurance laws in Colorado in 2003. This article will discuss some of the key factors and changes which took place in order to benefit and protect the citizens of Colorado. Some of the topics are:
The new law provides Colorado citizens the power to make sure insurance companies pay claims in a reasonable and timely manner.
What is this new law? House Bill 08-1407. The objective of the law is to put a stop to unreasonable denials or delays by insurance companies. The law increases the penalties on insurance companies for their unreasonable conduct with respect to claims.
Who benefits from the new law? Colorado citizens claiming insurance benefits from their own insurance company. Injured people in Colorado have been powerless to bring large claims against insurance companies because attorneys’ fees could eat up much of their settlement money. The new law provides Colorado citizens the power to make sure insurance companies pay claims in a reasonable and timely manner by requiring unreasonable insurance companies to pay the owed benefits, double damages, and attorneys’ fees.
For example, let’s say your claim has damages of $30,000 and the insurance company unreasonably delayed or denied the claim. Under the new law you could receive double the $30,000 plus attorneys’ fees (let’s say $10,000). Therefore the insurance company would have to pay you $70,000 ($10,000 of which would pay your attorneys’ fees) for their violation of the new law.
What type of insurance companies can be penalized by this new law? The law applies to health insurers, disability insurers and nearly any other kind of insurance. The law does not apply to workers’ compensation insurance, life insurance and title insurance. If you believe that workers’ compensation, life insurance, and/or title insurance has unreasonably denied your claim you cannot use this new law, however, you may be able to use other laws to help you seek benefits.
When does the new law go into effect? The new law goes into effect on August 6, 2008. However, the language of the law is not clear as to how that date practically plays out. It is unclear whether the law applies only to claims after August 6, 2008 or if it applies to claims that have been ongoing for the past year or two.
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