Both federal and Colorado courts applying Colorado law have held consistently that anyone who pays for an underinsured motorist policy does so for the purpose of securing financial protection and peace of mind. Goodson v. Am. Standard Ins. Co. of Wisconsin, 89 P.3d 409, 414 (Colo. 2004)(“Insureds enter into insurance contracts for the financial security obtained by protecting themselves from unforeseen calamities and for peace of mind, rather than to secure commercial advantage.”); see also Phoenix Ins. Co. v. Trinity Universal Ins. Co., 2013 WL 4510304 (D. Colo. Aug. 26, 2013)(same).
Put the above in the context of the Colorado statutes enacted in 2008 recognizing that insurance benefits cannot be unreasonably delayed. By denying all payments on “benefits owed,” delay of benefits which are not disputed over over which there is no disagreement risks violation of teh statutes. If benefits owed are unreasnably delayed, insurance companies have reneged on their promises of peace of mind and financial security. That could be bad faith breach of insurance contract.
Colorado case law holds that when an “insurer's actions expose the insured to being personally liable for the monetary obligations underlying the insured's claims,” the purpose of having insurance is defeated. Goodson, 89 P.3d at 414. If you have suffered injuries by a covered accident, your medical bills are personal obligations which you (thought you) covered by buying insurance. In effect, unreasonable delay is adding injury to injury. You are again damaged, this time bby your insurance company.
If you file suit, your insurance comapny will likely file a motion for summary judgment, arguing that any alleged delay was not unreasonable, but they make up all sorts of poor excuses for delaying payments on benefits owed. Know your rights: “insurers are statutorily prohibited from engaging in certain conduct—namely, acts of unreasonable delay or denial of payment of benefits, as defined in the statute.” Kisselman v. Am. Family Mut. Ins. Co., 292 P.3d 964, 975 (Colo. App. 2011) cert. denied, 2012 WL 4482571 (Colo. 2012). See also Riccatone v. Colorado Choice Health Plans, 2013 COA 133 ¶ 27 (C.R.S. 10–3–1115 “provides that ‘[a] person engaged in the business of insurance shall not unreasonably delay or deny payment of a claim for benefits owed to or on behalf of any first-party claimant’”).
One popular tactic (or trick) with insurance companies is to argue that the entirety of the claims for benefits owed must be fully liquidated, by settlement or judicial decree, before any payment is made. That argument would defeat the intent of the statutes, and courts should reject it. “Section 10–3–1116 was enacted [in 2008] as a remedial measure, intended ‘to curb perceived abuses in the insurance industry.’” Stresscon Corp. v. Travelers Prop. Cas. Co. of Am., 2013 COA 131 ¶ 124.