Your Own Insurer Is Sitting on Your Claim. Colorado Prices That Delay at Double.

There is a particular kind of frustration that belongs only to people dealing with their own insurance company. The at fault driver’s carrier is supposed to fight you. That is adversarial by design and nobody is surprised by it. Your own insurer is different. You picked the company, you have paid the premium every month for years, and when you finally need the coverage you bought, the file goes quiet.

Colorado has an unusual answer to that problem. Most states leave you with a breach of contract claim and the slow satisfaction of eventually getting what you were owed. Colorado attaches a statutory price to unreasonable delay, and the number is not a nuisance figure. It is two times the covered benefit, plus your attorney fees and court costs, on top of the benefit itself.

The rule is narrower than a lot of published summaries suggest, and the narrowness is the part worth understanding before you assume it applies to your situation.

The Statute Runs Against Your Insurer, Not the Other Driver’s

This is the single most common misunderstanding, and it sends people down the wrong road for months.

C.R.S. 10-3-1115 prohibits an insurer from unreasonably delaying or denying payment of a claim for benefits owed to a first party claimant. First party means the claimant has a contractual relationship with that insurer. You are a first party claimant against your own uninsured motorist coverage, your own underinsured motorist coverage, your own medical payments coverage, and your own collision and property damage coverage.

You are not a first party claimant against the driver who hit you and his carrier. That relationship is third party, it is governed by different rules, and the statutory penalty does not reach it. If the other driver’s adjuster has been stringing you along for five months, that is aggravating and it may matter in other ways, but it is not a 10-3-1115 claim.

Which means the statute becomes relevant in a car crash almost entirely through your own UM, UIM, and MedPay coverage. That is where the leverage lives.

What the Remedy Actually Is

C.R.S. 10-3-1116 provides that a first party claimant whose claim has been unreasonably delayed or denied may bring an action in district court to recover reasonable attorney fees and court costs and two times the covered benefit. The statutory text is short and you can read it in a minute on FindLaw’s copy of section 10-3-1116.

Two things about that language get misreported constantly. The first is the word “up.” A great deal of Colorado legal content describes this as recovering up to two times the covered benefit, as though the multiplier were a ceiling a judge might land under. The statute does not say up to. It says two times the covered benefit.

The second is the relationship between the penalty and the benefit itself. The two times award is a separate statutory remedy, not a substitute for the money you were owed in the first place. An insurer that unreasonably sits on a covered benefit is exposed to the benefit and to the statutory penalty and to fees.

Note also that the claim goes to district court. This is not a county court matter regardless of how modest the underlying benefit is, and that routing has practical consequences for timeline and cost.

Unreasonable Has a Definition, and It Is Not About Motive

People assume a bad faith claim requires proving the adjuster was malicious, or that someone inside the company decided to cheat them. The statutory standard is considerably less dramatic than that.

An insurer delays or denies unreasonably when it does so without a reasonable basis for the action. That is an objective test. It asks what the company knew, what it did with what it knew, and whether the resulting decision had a defensible foundation. It does not ask whether anyone at the company felt any particular way about you.

In practice this reframes the whole inquiry around the claim file. What did the adjuster request, when did they receive it, what did they do in the interval, and what basis did they articulate for the position they took. An insurer that denied a claim after a genuine investigation and reached a defensible conclusion has a reasonable basis even if it turns out to be wrong. An insurer that denied a claim without investigating, or that requested the same records four times and let the file sit between requests, has a harder story to tell.

Our page on common insurance delay tactics covers the patterns that show up repeatedly in these files.

Statutory and Common Law Bad Faith Are Different Claims

Colorado recognizes a common law bad faith claim alongside the statutory one, and they are not interchangeable.

Common law bad faith is the older theory. It requires showing the insurer acted unreasonably and that it knew or recklessly disregarded that its conduct was unreasonable. That knowledge element is a real burden. What it buys is a broader damages picture, including emotional distress and consequential losses, and the possibility of exemplary damages in cases of genuinely egregious conduct.

The statutory claim drops the knowledge element and fixes the remedy. It is easier to establish and more predictable in what it pays.

The two are frequently brought together, because they are aimed at different pieces of the same conduct. The strategic question is which theory the facts support most strongly, and that is not obvious from the outside. Our overview of the Colorado bad faith insurance statutes goes through how the theories fit together.

What Delay Looks Like in a Real UIM File

The abstract version of this is hard to picture, so here is the shape it usually takes after a crash on the I-25 corridor.

The at fault driver carries state minimum limits. You settle with his carrier for the full policy limit, which does not begin to cover a surgical shoulder and four months out of work. You turn to your own underinsured motorist coverage, which is exactly what it exists for.

Then the file slows down. Your own carrier asks for the records you already sent. It requests an independent medical examination and takes six weeks to schedule it. The examiner produces a report questioning whether your shoulder was degenerative. The adjuster goes quiet for another month, then offers a fraction of the limits without explaining how the number was reached.

None of those steps is independently outrageous. An insurer is entitled to investigate, entitled to an examination, entitled to disagree with your treating physician. The question the statute asks is whether the cumulative handling had a reasonable basis, and that question is answered from the claim file rather than from the adjuster’s tone on the phone.

Document the Handling While It Is Happening

The evidence for these claims is built from a record most people do not realize they are creating.

Put things in writing. A phone call in which an adjuster promises a decision by the end of the month leaves no trace. A short email confirming that conversation leaves a timestamped one. When you send records, note what you sent and when. When the carrier requests something, note the date, and note the date you complied.

What you are assembling is a timeline that shows what the insurer had and what it did in the gaps. That timeline is the whole case. It is far easier to build contemporaneously than to reconstruct a year later from memory and partial records.

The Division of Insurance Is a Separate Track

A statutory claim is not your only option, and it is not always the fastest one.

The Colorado Division of Insurance, part of the Department of Regulatory Agencies, investigates consumer complaints against insurers. It reported recovering more than $17.6 million for Coloradans in a recent fiscal year, including roughly $3.9 million on auto insurance complaints specifically. Those figures come from the Division’s annual complaint and recoveries report.

A complaint costs nothing and takes very little time. It does not replace a legal claim and it does not toll any deadline, but it creates a regulatory record of the handling and it occasionally moves a file that has been stuck for reasons nobody can articulate.

Where This Sits Against Your Other Deadlines

A bad faith claim does not extend the deadline on the underlying crash claim. Those run on separate tracks, and the underlying motor vehicle limitations period keeps moving while you argue with your carrier about coverage.

That matters more than it sounds. People sometimes treat the fight with their own insurer as the main event and let the claim against the at fault driver drift, on the assumption that resolving one resolves the other. It does not. The sequencing has to be managed deliberately, particularly where a UIM claim depends on how the underlying liability settlement was handled.

When Delay Stops Looking Like Process

Todd Travis and Jordan Travis read claim files for a living. Sometimes the delay turns out to be ordinary and the answer is patience. Sometimes the file shows an insurer that never had a basis for the position it took, and Colorado prices that outcome at a number worth pursuing. If your own carrier has gone quiet on a covered benefit, send us the file and we will tell you which one it looks like.