Your Insurer Delayed Your Claim. Colorado Lets You Recover Twice the Benefit Plus Fees.
Most people assume that a slow insurance company is simply a fact of life. The adjuster stops returning calls. A decision that was promised in two weeks takes four months. The carrier requests the same medical records for the third time, then schedules an examination with a physician of its choosing, then goes quiet again. It reads as bureaucracy. Irritating, but not actionable.
Colorado law takes a different view. Since 2008, this state has had one of the more forceful statutory remedies in the country for insurers who unreasonably delay or deny benefits owed to their own policyholders. It is not a vague appeal to fairness. It is a specific cause of action with a specific number attached, and the number is large enough that carriers pay attention when it is invoked properly.
What the Statute Provides
Two sections work together. 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. C.R.S. 10-3-1116 supplies the remedy: 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.
Read that remedy carefully, because the structure is frequently misdescribed. The two times figure is a penalty calculated on the covered benefit. It sits alongside the benefit itself, which remains payable under the policy, and alongside attorney fees and costs. Insurers have repeatedly argued in Colorado courts that the provision should be read more narrowly. Those arguments have not carried the day.
Who Counts as a First-Party Claimant
This is the threshold question and it disqualifies a lot of people who assume the statute applies to them.
A first-party claimant asserts an entitlement to benefits owed under an insurance policy. That means you are claiming against your own insurer under your own contract. Uninsured and underinsured motorist claims qualify. Medical payments coverage qualifies. Property damage claims under your own collision coverage qualify. Health and disability benefits qualify.
What does not qualify is the ordinary liability claim against the driver who hit you. When you pursue the at-fault driver’s carrier, you are a third party. That carrier owes duties to its own insured, not to you, and the statutory remedy is unavailable no matter how badly they behave. This distinction explains why so much of the leverage in a Colorado injury case sits in the portion handled through your own coverage.
Unreasonable Does Not Mean Malicious
The standard is whether the insurer denied or delayed benefits without a reasonable basis. It is measured against what a reasonable insurer would have done under the circumstances, evaluated on the information available to the carrier at the time.
Colorado courts have made several points that matter here. A claim being fairly debatable does not automatically make a denial reasonable. An insurer cannot manufacture support for a coverage decision after the fact, which means the file as it existed when the decision was made is what gets examined. And liability under these sections is not limited strictly to claims handling conduct.
None of that requires proving the adjuster acted in bad conscience. The inquiry is about the reasonableness of the conduct, not the state of anyone’s heart, which is a considerably lower bar than most policyholders assume.
Delayed Then Paid Still Counts
One of the most useful features of the statute is that it reaches benefits that were eventually paid. The Colorado Supreme Court addressed this directly in a 2018 decision analyzing how the two times remedy operates where an insurer unreasonably delayed benefits before ultimately paying them.
The practical consequence is significant. A carrier cannot sit on a clearly owed payment for a year, pay it once litigation looks likely, and treat the delay as costless. The delay itself is the violation. For a person who could not afford treatment during the months the carrier was stalling, that is not an abstraction.
What Unreasonable Conduct Tends to Look Like
In the files we see, the recurring patterns include repeated requests for records the carrier already possesses, an offer that ignores uncontroverted treating physician opinions, reliance on a records review by a physician who never examined the claimant while disregarding the treating specialists who did, valuation of a claim through software without individualized review, failure to explain the specific policy basis for a denial, and simple unexplained silence for months at a stretch.
Any one of these in isolation may be defensible. A pattern of them across a file, documented in writing, is what a bad faith claim is built from. Our page on insurance company delay tactics breaks down the specific behaviors worth documenting as they happen.
The Statutory Claim Is Not the Only Claim
Colorado also recognizes common law bad faith breach of insurance contract, which requires proof that the insurer’s conduct was unreasonable and that it knew or recklessly disregarded that its conduct was unreasonable. That is a higher standard than the statutory claim, and it opens different remedies.
The two are generally pursued together where the facts support both, because they are complementary rather than alternative. The statutory claim is easier to establish and carries the doubling remedy and fee shifting. The common law claim can reach consequential damages the statute does not address. Worth noting: punitive damages are not an available remedy on the statutory cause of action itself.
The Deadline Is Longer Than Insurers Once Argued
Carriers spent years contending that statutory delay and denial claims were penalty actions subject to a one year limitations period, which would have quietly extinguished most of them before a policyholder understood a claim existed. The Colorado Supreme Court rejected that reading, reasoning that if the cause of action were treated as a penalty under that provision, the clock would never begin to run at all.
The practical effect is that policyholders are not racing a one year deadline while their carrier stalls. That does not make delay harmless, because evidence still degrades and adjusters still rotate off files, but it removes a trap that insurers used to rely on. The safer approach remains to get the conduct evaluated while the file is active rather than after it closes.
The Claims File Is the Case
Nearly everything that decides a bad faith claim lives inside documents the insurer controls. The adjuster’s activity log with its timestamps. Internal notes explaining why an offer was set where it was set. Reserve entries showing what the carrier privately believed the claim was worth while telling you something else. Authority levels showing whether the adjuster could even approve a reasonable number. Correspondence with any physician who reviewed records. Training materials and claims handling guidelines describing what the company’s own standards required.
Obtaining that material takes formal discovery, and carriers resist producing it vigorously, frequently on privilege and work product grounds. Those fights are ordinary in this kind of litigation. What makes them winnable is a well documented external record on your side showing what was requested, what was provided, and how long each step actually took.
Adjusters Are Not Personally Liable
The Colorado Supreme Court held in 2022 that individual adjusters cannot be held personally liable under these sections. The claim runs against the insurance company. The reasoning was straightforward, in that the insurer is the party to the policy and the party obligated to pay the covered benefit.
This is worth knowing because it shapes strategy rather than eliminating anything. The adjuster’s conduct remains central evidence. Their notes, their internal communications, their supervisor’s authority levels, and the claims file itself are the substance of the case. They are simply not a defendant.
Build the Record While It Is Happening
Bad faith claims are won with documentation created contemporaneously, not reconstructed later from memory. Put substantive communication in writing. After a phone call, send a short email summarizing what was said. Keep every letter and every explanation of benefits. When a carrier asks for something it already has, note the date it was previously provided. When a deadline the adjuster set passes without action, note that too.
This costs almost nothing while a claim is pending and it is nearly impossible to recreate afterward. Our page on how to sue an insurance company for bad faith in Colorado covers what the record needs to contain before a claim is filed.
What a Reasonable Insurer Actually Does
It helps to know the baseline, because the contrast is what makes unreasonable conduct visible. A carrier handling a claim properly acknowledges it promptly, tells you what it needs and why, investigates within a defined period, evaluates the file on the evidence in front of it, explains the specific policy language behind any denial, and pays what is undisputed even while continuing to investigate what is disputed.
That last element is the one most often ignored. Where part of a claim is clearly owed and part is genuinely contested, an insurer does not get to withhold everything until the contested portion resolves. Sitting on undisputed benefits to gain leverage on the disputed remainder is close to the center of what the statute was written to prevent.
Talk to a Colorado Injury Lawyer
Rampart Injury Lawyers represents policyholders in Castle Rock, Douglas County, and along the I-25 corridor from Greenwood Village to Colorado Springs. Todd Travis has litigated insurance bad faith claims in Colorado since 1994, and the firm handles first-party disputes where a carrier has decided its own insured is worth less than the policy promises. If your insurer has been sitting on a claim without explaining why, contact our office for a free consultation with an attorney.
