Colorado Personal Injury Lawyers: The new Colorado law regulating insurance companies for unreasonable delays and effective denial on August 6, 2008
The new law gives citizens of Colorado the power to make sure insurance companies pay complaints reasonably and promptly.
What is this new law? House Bill 08-1407. The goal of the law is to end unreasonable denials or delays by insurance companies. The law increases penalties for insurance companies for their unreasonable behavior in relation to claims.
“A first-party applicant whose request for payment of benefits has been unreasonably delayed or denied can file an action in a district court to recover reasonable attorneys’ fees and court fees, and twice the covered benefit.”
Who benefits from the new law? Colorado citizens applying for insurance benefits from your insurance company. The Colorado casualties were unable to make major claims against insurance companies because attorney fees could consume much of the money from their settlements. The new law empowers citizens of Colorado to ensure that insurance companies pay claims in a reasonable and timely manner, requiring unreasonable insurance companies to pay their indemnities, double damages and legal fees.
For example, let’s say the claim has $ 30,000 in damage and that the insurance company has unreasonably delayed or denied the claim. Under the new law, you may receive double $ 30,000 plus legal fees (say $ 10,000). Therefore the insurer should pay you $ 70,000 (of which $ 10,000 will pay legal fees) for their violation of the new law.
“A person engaged in the insurance industry must not unreasonably delay or deny payment of a claim for benefits owed in favor of or on behalf of any first-party applicant.”
Which type of supplier can be penalized by this new law? The law applies to health insurers, disability insurers, automotive insurers and almost any other type of insurance. The law does not apply to worker compensation insurance, life insurance and title insurance. If you believe that workers’ compensation, life insurance and / or title insurance have unreasonably denied your claim, you cannot use this new law, however, you may be able to use other laws to help you get benefits. .
When will the new law come into force? The new law will enter into force on August 6, 2008. However, the language of the law is unclear on how that date practically unfolds. It is unclear whether the law applies only to complaints after August 6, 2008 or if it applies to complaints that have been ongoing for the past two years.
If you wish to view this bill:
- go to the Colorado General Assembly website http://www.leg.state.co.us/
- Follow the “Bill Digest” link
- Go to Bill Digest 2008
- The “Digest of Bills – 2008” is classified; follow the “Insurance” link