Insurance Company Delay Tactics: How They Run You Out and How We Stop It
Every delay is a choice. Every choice is a tactic. Every tactic has a counter.
Tired of Waiting? Let’s End the Delay.
Attorney fees contingent on recovery. Client remains responsible for costs of litigation (filing fees, deposition costs, expert witness fees, and similar litigation expenses) regardless of outcome, unless modified by written fee agreement.
The Delay Is Not a Bug in the System. It Is the System.
Insurance companies use a catalog of delay tactics designed to wear down injured policyholders until they accept less than their claim is worth. Each tactic is defensible in isolation. Taken together, they reveal a pattern that Colorado Revised Statutes § 10-3-1115 specifically prohibits. An insurer cannot unreasonably delay payment of benefits owed. But “unreasonable” is not defined as any particular number of days. It is defined as the absence of a reasonable basis for the delay. Under Schultz v. GEICO Casualty Co., 429 P.3d 844, 848 (Colo. 2018), the only question is whether the delay lacked a reasonable basis. The tactics in this guide are the most common ways insurers manufacture delay while trying to maintain the appearance of good faith. They fail that test when the pattern is exposed.
The Legal Backdrop: What Colorado Law Requires of Insurers
Colorado’s Unfair Claims Settlement Practices Act, C.R.S. § 10-3-1104(1)(h), imposes specific duties on insurers. Failing to acknowledge communications promptly (§(h)(II)), failing to adopt reasonable investigation standards (§(h)(III)), refusing claims without investigation based on all available information (§(h)(IV)), failing to affirm or deny coverage in a reasonable time (§(h)(V)), and requiring duplicate document submissions (§(h)(IX)) are all specifically prohibited.
The Colorado Division of Insurance Regulation 5-1-14 establishes specific time frames that insurers have to act upon a claim. Insurers must decide whether or not an insured is entitled to receive benefits under their insurance contract and they must make payment(s) within sixty (60) days from the date that the insurer receives a valid and complete claim; provided that there is no unreasonable dispute as to entitlement. 3 Colo. Code Regs. § 702-5-1-14 Sec. 4(A). If an insurer fails to timely pay all or part of the claim, it may be liable for 8% annual interest on the unpaid portion of the claim benefit and $100 per day for each day past the sixtieth day that the insurer has failed to timely pay. This statute was enacted by the legislature based upon its recognition that delays in payment cause irreparable harm. Thus, these tactics were developed to avoid such statutes while remaining technically compliant with their requirements.
Tactic 1: The Vanishing Adjuster
How It Works
The insurance company assigns your claim to one adjuster who will call you, ask some reasonable questions, tell you they’ll get back to you within a week or so, and then disappear. When you try to contact them, no one returns your calls. Your emails are ignored. After weeks (or months) of this, when you can’t avoid calling again, you’re told that your claim was transferred to another adjuster, who needs to “catch up” on everything before he can even talk to you. This resets the clock.
Why It Violates Colorado Law
C.R.S. § 10-3-1104(1)(h)(II) requires that after receiving notice from the insured regarding their claim, the insurer must respond to each communication related to the claim by acknowledging receipt thereof and by taking action reasonably promptly thereon. A system which allows for the repeated disappearance of the same adjuster constitutes a systemic failure to comply with the above requirements. Every transfer of the file to a new adjuster constitutes a reasonless delay.
How We Defeat It
We keep records of all attempts to communicate with you and the insurance company and we note the date and time of these contacts. We send follow up correspondence to the insurance company via certified mail with tracking if necessary. Once a file has been transferred from one adjuster to another, we may request documentation as to why this occurred and what timeline should be expected moving forward. This creates a record of delays which we use as proof at trial.
Tactic 2: The Document Carousel
How It Works
You provide your medical records to an insurance company. Weeks go by before they ask for those same medical records again; they tell you there was a problem with the file being transferred from one computer system to another, the files were migrated from one system to another, or the claims were reassigned. So you send them. Again. Weeks later, the insurance company asks for the records once again. Each time they ask for the records, each time you send them, it will take weeks longer for the insurance company to decide what to do about your claim. The length of time it takes to gather and send the records (again), creates a “carousel” which will push back the timeline when the insurance company makes its final decision on your claim. Each time the insurance company sends you a “request for additional documentation”, it is always presented as a routine administrative request. However, in total, the carousel can delay a claim decision process by months.
Why It Violates Colorado Law
C.R.S. § 10-3-1104(1)(h)(IX) specifically states that it is unlawful to require a claimant or claimant’s physician to submit a preliminary claim report and then require additional formal proof of loss forms which include the same information as previously submitted. That is exactly what the document carousel is – but under a different name.
How We Defeat It
We keep all records of submissions made by us to an insurance company, including the date on each letter sent to accompany the documents being submitted and confirmation of delivery of such documents. If an insurance company requests documents we have previously submitted to them, we are able to refer them to our previous submission date and also to the tracking numbers associated with delivery confirmation as applicable. Rather than submitting the requested documents again, we document the repeated request as further evidence of bad faith as necessary. When it becomes obvious through review of a file, that an insurance company has repeatedly asked for documents after having been furnished copies of those very same documents, their defense to deny coverage based upon lack of information begins to melt away.
Tactic 3: The Investigation That Never Concludes
How It Works
The insurer tells you the claim is “under investigation.” For weeks. For months. The investigation expands to include additional witnesses, additional records, additional independent medical examinations. Every week brings a new request for information or a new question about a minor detail. The investigation never concludes because conclusion would require a decision. And a decision would trigger the statutory framework.
Why It Violates Colorado Law
Under C.R.S. § 10-3-1104(1)(h)(V), insurers must affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed. An investigation that exceeds the 60-day benchmark in Regulation 5-1-14 without a clear factual basis for the extension crosses the line.
How We Defeat It
We may demand written explanations for each request and specific timelines for the investigation’s conclusion. We can also identify the point at which the investigation has received all reasonably available information. After that point, continued delay lacks a reasonable basis. In litigation, depositions of the assigned adjuster expose the fact that the investigation was complete in substance long before the decision was finally issued.
Tactic 4: The Lowball Offer
How It Works
After months of delay, the insurer offers a settlement figure that bears no relationship to the documented damages. A spinal cord injury case with projected lifetime care costs in the millions receives an offer of tens of thousands. A wrongful death case receives an offer that would not cover the funeral. The offer is designed to test whether the claimant is exhausted enough to accept substantially less than the case is worth.
Why It Violates Colorado Law
C.R.S. § 10-3-1104(1)(h)(VII) prohibits compelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered. The pattern is itself the violation. See Soicher v. State Farm Mut. Auto. Ins. Co., 2015 COA 46, 351 P.3d 559 (unreasonable delay of full covered benefit is a statutory violation).
How We Defeat It
We may respond with a complete damages model: medical bills, lost wages, future care projections from board-certified specialists, life care planning reports, and, where applicable, economic loss calculations from vocational experts. The lowball offer, in the context of a rigorous damages submission, becomes an exhibit. At trial, a jury sees the insurer’s offer compared to the documented damages and draws the obvious conclusion about the insurer’s conduct.
Tactic 5: The Paper Review
How It Works
You submit your treating physician’s evaluation, neuropsychological testing, neuroimaging, and specialist reports. The insurer hires a medical reviewer who has never examined you, never spoken to your treating doctors, and often has no specialty relevant to your condition. The paper reviewer issues a report minimizing or disputing your diagnoses. The insurer then cites that paper review as the “reasonable basis” for its denial.
Why It Violates Colorado Law
A paper review without examination can constitute failure to conduct a reasonable investigation based on all available information, in violation of C.R.S. § 10-3-1104(1)(h)(IV). Under Am. Family Mut. Ins. Co. v. Allen, 102 P.3d 333, 344 (Colo. 2004), an investigation that ignores conflicting evidence or fails to interview relevant witnesses can support a bad faith finding. A paper reviewer who never examined the patient and relies only on selected portions of the medical record is exactly that kind of incomplete investigation.
How We Defeat It
We can hold the paper reviewer to testify. The medical record is placed before each deposed paper reviewer who admits that they did not see everything in the medical record, did not examine the patient, has no training/specialty as it relates to the subject matter of the case, or is hired by insurers on an ongoing basis. That admission transforms the paper reviewer from someone to be used against you (the plaintiff) in support of a claim denial into evidence of bad faith. This is very effective in traumatic brain injury claims due to the fact that the objective neuropsychological testing done in most traumatic brain injuries is at odds with what was said in the paper reviewer’s report.
Tactic 6: The Software Valuation
How It Works
For auto and bodily injury claims, insurers use proprietary software (Colossus, ClaimIQ, and similar systems) that generates a “suggested” settlement range based on coded inputs. The adjuster tells you the software has evaluated the claim at a particular figure. The software becomes the black box the insurer hides behind. The output ignores or minimizes unique aspects of your injuries, non-economic damages, and the specific circumstances of your case.
Why It Violates Colorado Law
Reliance on software valuation to the exclusion of case-specific evaluation can violate the duty to conduct a reasonable investigation based on all available information under C.R.S. § 10-3-1104(1)(h)(IV). It can also violate the prohibition on arbitrary caps or quotas in claims handling under § 10-3-1104(1)(hh).
How We Defeat It
We may demand discovery of the software inputs, the training parameters, and the adjuster’s manual overrides (if any). We can then compare the software output to the documented evidence and the jury verdicts in similar cases. When the software valuation is exposed as a cost-control tool rather than a good-faith evaluation, the reliance on it becomes evidence of systemic bad faith.
Tactic 7: Withholding the Undisputed Portion
How It Works
Even when part of your claim is clearly covered, the insurer refuses to pay anything until the disputed portions are resolved. You are told that releasing “partial payment” is not company policy, or that the claim must be adjudicated in its entirety before any funds are released. Meanwhile, medical bills accumulate, credit suffers, and financial pressure mounts.
Why It Violates Colorado Law
As United Policyholders explains in its Colorado consumer guide, insurers should pay undisputed amounts without delay and should not hold back any part of your benefits while other parts are uncertain. This principle is grounded in the implied duty of good faith and fair dealing. Under Goodson v. American Standard Ins. Co., 89 P.3d 409 (Colo. 2004), and Soicher, 2015 COA 46, delay of an undisputed amount is unreasonable delay.
How We Defeat It
We may issue a formal demand for payment of the undisputed amount, citing the specific statute and case law. If the insurer refuses, that refusal becomes a distinct basis for a bad faith claim. The statutory multiplier under § 10-3-1116(1) applies to the unreasonably delayed undisputed portion. And the ongoing financial harm caused by the withholding becomes part of the compensatory damages in the common law bad faith claim.
How Trial Preparation Ends the Delay
Every tactic above is premised on one reality: that the policyholder doesn’t have the resources, stamina, or representation to compel the insurer’s hand. Trial preparation alters that reality in force from the first week of representation. When the insurer senses expert reports secured, adjuster depositions scheduled, the complete claims file demanded, a full damages model assembled, the math on delay flips from calculation of how long it will take to save to the more costly course of resolution.
Rampart Injury Lawyers prepares bad faith claims for trial from week one, serving the I-25 corridor from Greenwood Village to Colorado Springs with our hub office in Castle Rock. We take fewer cases and prepare each one with the depth required. When the insurer knows it will face courthouse rather than conference room, the delays stop. For the full procedural walkthrough, see How to Sue Your Insurance Company for Bad Faith. Return to Colorado Insurance Bad Faith Lawyers (Pillar Page).
Stop the Delay. Call Rampart Today.
Attorney fees contingent on recovery. Client remains responsible for costs of litigation (filing fees, deposition costs, expert witness fees, and similar litigation expenses) regardless of outcome, unless modified by written fee agreement.
Frequently Asked Questions: Insurance Delay Tactics
How long can an insurance company delay my claim in Colorado?
Colorado Division of Insurance Regulation 5-1-14 requires insurers to make a decision on claims and pay benefits within 60 days of receiving a valid and complete claim, unless a reasonable dispute exists. 3 Colo. Code Regs. § 702-5-1-14 Sec. 4(A). Failure to comply can result in 8% annual interest on the unpaid amount plus $100 per day in penalties. Under C.R.S. § 10-3-1115, any delay without a reasonable basis, regardless of duration, constitutes a statutory violation.
What should I do if my insurance company keeps asking for the same documents?
Document every submission with dates and delivery tracking. Under C.R.S. § 10-3-1104(1)(h)(IX), requiring duplicate submissions is specifically prohibited. When the insurer requests documents you have already provided, respond in writing with reference to the prior submission date. The pattern of duplicate requests becomes evidence of bad faith. See the full catalog of red flags: Signs Your Claim Is Being Denied in Bad Faith.
Can I file a complaint about insurance company delays?
Yes. The Colorado Division of Insurance accepts consumer complaints about insurance company conduct, including unreasonable delay. The DOI does not award damages but can investigate and may take regulatory action. A DOI complaint does not toll the statute of limitations. Consult an attorney about separately pursuing a civil bad faith claim for damages.
What if the insurance company tells me the investigation is still ongoing after many months?
Request a written explanation of what remains to be investigated and a specific timeline for conclusion. Once the insurer has received all reasonably available information, continued delay lacks a reasonable basis. Under Am. Family Mut. Ins. Co. v. Allen, 102 P.3d 333 (Colo. 2004), an investigation that ignores available evidence or fails to interview relevant witnesses can support a bad faith finding.
Is a paper medical review by the insurance company legitimate?
An insurer can retain a medical reviewer, but a review that ignores the treating physician’s findings, relies on incomplete records, or is conducted by someone without the relevant specialty can constitute failure to conduct a reasonable investigation under C.R.S. § 10-3-1104(1)(h)(IV). Depositions of paper reviewers often expose these deficiencies.
Can I recover damages for the time the insurance company delayed my claim?
Yes. Under C.R.S. § 10-3-1116(1), you can recover two times the covered benefit plus attorney fees and court costs for unreasonable delay, even if the insurer eventually pays. Under Nibert v. GEICO, 2017 COA 23, this multiplier applies to amounts that were delayed and then paid. Common law bad faith claims additionally allow recovery of emotional distress damages and economic losses caused by the delay. Full damages breakdown: Bad Faith Damages in Colorado.
Explore More About Colorado Insurance Bad Faith
Pillar: Colorado Insurance Bad Faith Lawyers – Complete overview of bad faith law and how we fight these cases.
Spoke 1: What Is Bad Faith Insurance in Colorado? – Legal definition, both frameworks, and the quasi-fiduciary duty.
Spoke 2: Signs Your Claim Is Being Denied in Bad Faith – Red flags that expose an insurer crossing the line.
Spoke 3: Colorado Bad Faith Insurance Statutes Explained – Deep dive into C.R.S. §§ 10-3-1115 and 10-3-1116 with key case law.
Spoke 4: How to Sue Your Insurance Company for Bad Faith – The process, timeline, and what to expect.
Spoke 6: Bad Faith Damages in Colorado – Statutory penalties, compensatory damages, punitive damages, and how they stack.
Sources and Legal Citations
Colorado Statutes and Regulations
C.R.S. § 10-3-1115 – Improper Denial of Claims: https://law.justia.com/codes/colorado/2021/title-10/article-3/part-11/section-10-3-1115/
C.R.S. § 10-3-1116 – Remedies for Unreasonable Delay or Denial: https://law.justia.com/codes/colorado/2021/title-10/article-3/part-11/section-10-3-1116/
C.R.S. § 10-3-1104(1)(h) – Unfair Claims Settlement Practices: https://law.justia.com/codes/colorado/title-10/regulation-of-insurance-companies/article-3/part-11/section-10-3-1104/
3 Colo. Code Regs. § 702-5-1-14 – Timely Decision/Payment Requirements: https://www.propertyinsurancecoveragelaw.com/blog/failure-to-make-timely-decisions-payments-in-colorado-will-lead-to-penalties-for-insurers-pursuant-to-title-3-colo-code-regs-%C2%A7-702-5-1-14/
Key Case Law
Goodson v. American Standard Ins. Co., 89 P.3d 409 (Colo. 2004): https://caselaw.findlaw.com/court/co-supreme-court/1058662.html
Am. Family Mut. Ins. Co. v. Allen, 102 P.3d 333 (Colo. 2004) (incomplete investigation)
Schultz v. GEICO Cas. Co., 429 P.3d 844 (Colo. 2018) (“without reasonable basis” standard)
Soicher v. State Farm, 2015 COA 46, 351 P.3d 559 (delay of undisputed portion)
Nibert v. GEICO Casualty Co., 2017 COA 23 (multiplier applies after late payment)
Practice Resources
Colorado Division of Insurance – File a Complaint: https://doi.colorado.gov/
United Policyholders – Insurance Consumer Rights in Colorado: https://uphelp.org/claim-guidance-publications/insurance-consumer-legal-rights-in-colorado/
Property Insurance Coverage Law Blog – Colorado Claims Handling: https://www.propertyinsurancecoveragelaw.com/blog/claims-handling-requirements-by-state-colorado/
Property Insurance Coverage Law Blog – Regulation 5-1-14 Analysis: https://www.propertyinsurancecoveragelaw.com/blog/failure-to-make-timely-decisions-payments-in-colorado-will-lead-to-penalties-for-insurers-pursuant-to-title-3-colo-code-regs-%C2%A7-702-5-1-14/
Colorado Civil Jury Instructions, Ch. 25: https://www.courts.state.co.us/userfiles/file/Court_Probation/Supreme_Court/Committees/Civil_Jury_Instructions_Committee/Chapter%2025.pdf
ALFA International – Colorado Insurance Law Compendium: https://www.alfainternational.com/compendium/insurance-law/colorado/
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