UM/UIM Arbitration in Castle Rock
UM/UIM arbitration in Colorado is a binding dispute resolution process used when you and your insurance company cannot agree on the value of your uninsured or underinsured motorist claim. Most Colorado auto policies contain mandatory arbitration clauses for UM/UIM disputes. The Colorado Supreme Court confirmed the enforceability of these clauses in Peterman v. State Farm Mut. Auto. Ins. Co., 961 P.2d 487 (Colo. 1998), holding that valid agreements to arbitrate in insurance policies are enforced as written, absent a conflicting and overriding public policy. The earlier case of Wales v. State Farm, 559 P.2d 255 (Colo. App. 1976) similarly declined to invalidate arbitration clauses in UM policies. Colorado arbitration is governed by the Colorado Uniform Arbitration Act, C.R.S. §§ 13-22-201 through 230.
What UM/UIM Arbitration Looks Like
Arbitration is a trial without a jury. Instead of presenting your case in a courtroom before twelve citizens, you present it in a conference room before one or three arbitrators. The rules are less formal than court, but the stakes are identical. The arbitrator’s decision is binding, meaning you typically cannot appeal it except in narrow circumstances.
Think of it as the difference between a formal dinner and eating at the kitchen table. The food is the same. The plates are different. The consequence of a bad meal is identical. You go hungry.
How the Process Works
Demand for arbitration. When negotiations break down, either you or your insurer can invoke the arbitration clause. This typically requires written notice. Your policy language specifies the exact procedure for initiating arbitration.
Selecting the arbitrator(s). Most policies specify how arbitrators are selected. Common structures include each side choosing one arbitrator, with those two selecting a neutral third, or both sides agreeing on a single neutral arbitrator. The Colorado Uniform Arbitration Act, C.R.S. §§ 13-22-201 through 230, governs arbitrator appointment, disclosures, and confirmation of awards as court judgments.
Discovery and preparation. Arbitration typically allows limited discovery. You will exchange medical records, expert reports, and witness lists. Depositions may be permitted depending on the arbitration agreement. The preparation phase is where your case is won or lost. Every medical record, every expert opinion, every dollar of economic loss needs to be documented, organized, and ready to present.
The hearing. Both sides present their evidence. You testify. Your medical experts testify. Your economic experts present lifetime cost projections. The insurer presents its evidence, which typically includes an independent medical examination (IME) by a doctor they selected, whose opinions conveniently minimize your injuries.
The award. The arbitrator issues a written decision specifying the amount of damages. Under the Colorado Uniform Arbitration Act, the award can be confirmed by the court and entered as a judgment enforceable like any other civil judgment.
Issues Unique to UM/UIM Arbitration
Coverage vs. Damages
UM/UIM arbitration can involve two separate disputes: whether coverage applies at all, and if so, how much the claim is worth. Some policies split these into separate proceedings. Others combine them. The procedural framework matters because a coverage dispute might be decided by a court rather than an arbitrator, depending on policy language.
Subrogation and Offsets
After the 2008 amendments to C.R.S. § 10-4-609, insurers can no longer offset the at-fault driver’s bodily injury payment against your UM/UIM limits. This was a significant change that increased recoveries for Colorado policyholders. Your insurer may have subrogation rights against the at-fault driver, and the interplay between subrogation and your recovery requires careful navigation.
Attorney Fees
Under Thurman v. State Farm, 942 P.2d 1327 (Colo. App. 1997), attorney fees and expenses incurred obtaining an underlying liability settlement are not recoverable from a UM/UIM carrier under the UM/UIM statute itself. However, if the insurer’s handling of the UM/UIM claim constitutes bad faith under C.R.S. §§ 10-3-1115 and 10-3-1116, attorney fees become recoverable as part of the bad faith damages, alongside two times the covered benefit. This creates a powerful incentive for insurers to handle UM/UIM claims reasonably. The threat of a bad faith overlay transforms every unreasonable denial into a potential fee-shifting event.
Why Arbitration Preparation Is Everything
Settlement mills view arbitration in UM/UIM cases as a mere procedure. The settlement mill submits a demand letter, appears at the arbitration hearing, and hopes they receive an acceptable award. However, this type of approach results in leaving money on the table and devalues the client’s injury.
At Rampart Injury Lawyers we take all aspects of UM/UIM Arbitration hearings with the same focus and attention as we would if it were being heard by a Jury. We have retained medical expert witnesses to provide clear descriptions of their clients’ injuries in terms that will resonate with the arbitrators. We have hired economist/actuary witnesses and life care planners to help us determine the long term financial impact (the true cost) of our clients’ injuries. When we present our case to the arbitrators, it is more than just telling them what occurred. It is showing them. When an arbitrator has seen the evidence; when he/she understands the mathematical consequences of his/her decision; and, when he/she realizes the extent of loss sustained, then that arbitrator is likely to make a fair and adequate award.
We have handled UM/UIM arbitrations involving catastrophic injuries including traumatic brain injuries, spinal cord injuries, and wrongful death. The common thread is preparation. Firms that prepare like they are going to trial are the firms that win in arbitration.
Injured by an Uninsured or Underinsured Driver?
Call Rampart Injury Lawyers at for a free consultation.
We handle UM/UIM claims from our Castle Rock office and serve 13 communities along the I-25 corridor, from Greenwood Village to Colorado Springs.
We work on contingency.
You pay no attorney fee unless we recover compensation for you
Costs and expenses: Under Colorado Rule of Professional Conduct 1.5, clients remain liable for costs and expenses regardless of outcome in certain circumstances. Costs and expenses will be discussed before representation begins.
FAQ: UM/UIM Arbitration
Q: Can I appeal a UM/UIM arbitration award?
A: Generally, UM/UIM arbitration awards are binding and final. Judicial review is extremely limited. Under the Colorado Uniform Arbitration Act, an arbitration award can be vacated only in narrow circumstances such as corruption, fraud, arbitrator misconduct, the arbitrator exceeding their authority, or the absence of an arbitration agreement. Disagreement with the amount of the award is not grounds for appeal.
Q: How long does UM/UIM arbitration take?
A: From the demand for arbitration to the hearing, the process typically takes 3 to 9 months depending on complexity, arbitrator availability, and the scope of discovery allowed. Simple cases may be heard in a single day. Complex catastrophic injury cases may require multiple hearing days.
Q: Who pays for the arbitration?
A: Arbitration costs, including the arbitrator’s fees, are typically shared between the insured and the insurer per the policy terms. Specific policy language controls.
Q: Can the insurer force arbitration if I want to go to court?
A: If your policy contains a mandatory arbitration clause, the insurer can generally compel arbitration. Under Peterman v. State Farm, 961 P.2d 487 (Colo. 1998), Colorado courts enforce these clauses. However, coverage disputes (as opposed to damages disputes) may be litigated in court depending on the policy language, and waiver analysis still applies if an insurer delays asserting the right to arbitrate.
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Related Sub-Pages: UM/UIM Coverage Explained | How to File a UM/UIM Claim | Colorado Insurance Bad Faith Lawyers
DISCLAIMER & ATTORNEY IDENTIFICATION
Rampart Injury Lawyers is a trade name of Travis Legal Offices, LLC. Responsible attorney: Todd A. Travis. Principal office: 333 Perry Street, Suite 203, Castle Rock, CO 80104. Phone: (303) 766-8766. This page is attorney advertising. The content is for general informational purposes only and is not legal advice. Reading this page, contacting the firm, or submitting an intake form does not create an attorney-client relationship. Past results do not guarantee future outcomes. Every case is different and the outcome of any legal matter depends on the specific facts and applicable law. For legal advice on a specific matter, consult a licensed Colorado attorney.
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