Twice the covered benefits plus attorneys’ fees and costs is what an insurance company must pay if it acts in bad faith when deciding an uninsured or underinsured insurance claim under CRS 10-3-1116. In this case, the claimant/plaintiff was awarded $0 damages on a statutory bad faith claim, but ultimately recovered three times the amount of UIM coverage available under the policy: double for statutory bad faith and a third under the settlement of a bad faith breach of contract claim. The court of appeals affirmed. First, it held that the policies were ambiguous on the identity of the insured, allowing the jury to conclude claimant was an insured. Then it held that even if the question of coverage was fairly debatable, delay or denying coverage was not necessarily reasonable. And finally, a successful statutory claim independently entitles a claimant to double the covered benefits.
Mind the gap. In this case, the gap is between a settlement less than the policy limits of an insured motorist who caused an accident, and the total amount of actual damages. Under a former version of CRS 10-4-609, underinsured motorist (UIM) coverage must cover the difference between any settlement and the total amount of damages – a reduction approach. But, the law changed, and now UIM policies must only cover the amount of total damages in excess of the policy limits of an insured motorist. Here, the UIM policy was excess and consistent with CRS 10-4-609. The court of appeals therefore held that UIM coverage was not available where, as here, the settlement was less than the policy limits of the available insurance. In light of the public policy reflected by the statute, the court was not free to reach a different result. Thus, there was no unreasonable denial of coverage.
“Are we there yet?” “Are we there yet?” In this case, addressing the finality of a trial court judgment, the court of appeals said “No!” Plaintiff brought a first-party claim against her insurance company under CRS 10-3-1116 for unreasonable delay or denial of payment and for bad faith breach of an insurance contract. The jury found for plaintiff and awarded damages on both counts. The statute, however, provides for two kinds of damages: 1) attorneys’ fees and costs, and 2) two times the covered benefit. Thus, attorneys’ fees are a component of damages. Until a final order on damages issues, no final judgment has entered. Without final judgment, the court of appeals lacks jurisdiction. The insurance company appealed judgment on liability before all claims had been resolved and before attorney fee damages had been ordered. Thus, the court dismissed the appeal.