During the course of an insurance company’s adjustment of a claim, policyholders tend to deal only with the insurance adjuster assigned to their claim.  It sometimes can feel like the claim will never get resolved and that the insurance company is passing the claim from one adjuster to another.  Oftentimes, claims can be delayed for considerable time periods.  The Colorado legislature sought to prevent undue delays in 2008 and enacted C.R.S. §§10-3-1115 and -1116.  Under these statutes, commonly referred to as Colorado’s “bad faith statute,” a policyholder whose claim for insurance benefits has been “unreasonably delayed or denied may bring an action in district court to recover reasonable attorney’s fees and court costs and two times the covered benefit.”

Recently, the Supreme Court of Colorado heard a case that discussed specifically whether an employee of an insurance company who adjusts an insured’s claim can also be liable for bad faith under C.R.S §§ 10-3-1115 and 10-3-1116. See Skillett v. Allstate Fire & Cas. Ins. Co., 2022 CO 12, 505 P.3d 664.  The Colorado Supreme Court held that such claims can only be brought against the insurance company and not the individual adjuster. The Court focused primarily on the statutes’ reference to the insurer: “for the purpose of an action brought pursuant to this section, and section 10-3-1116, an insurer’s delay or denial was unreasonable if the insurer delayed or denied authorizing payment of a covered benefit without a reasonable basis for that action.”  Because the insurer—not an individual employee—authorizes payment, this language indicates that an action for unreasonable delay or denial of insurance benefits is triggered by a decision of the insurer, not the adjuster.  Therefore, only the company itself can be liable for bad faith damages.

If you believe that an insurance company has breached their contract of insurance and/or unreasonably delayed or denied benefits owed to you under your policy, contact our attorneys today for a free consultation.


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