The uninsured/underinsured motorist statute found in our Colorado State laws at C.R.S. § 10-4-609, mandates that an insurance company must evaluate their insured’s loss and pay the claim when due. Furthermore, C.R.S. § 10-3-1115/1116 provides for a penalty against an insurance company if that company unreasonably delays or denies a covered benefit when due. Nonetheless, whether an insurance company had an obligation to pay piecemeal benefits remained unsettled until May 7, 2015 when the Colorado Court of Appeals issued its decision in Fisher v. State Farm Automobile Insurance Company, 13 CA 2361. Insurance companies hate the idea of paying part of a claim, and then having to pay more when more damages/losses are incurred or substantiated. They prefer the leverage associated with holding undisputed money ransom until a policyholder capitulates and accepts less to resolve an entire claim forever. Therefore, the Fisher case is groundbreaking.
In February of 2010, Dale Fisher was injured in a motor vehicle collision. The person who caused the auto accident with Mr. Fisher had only a $25,000 automobile insurance policy. Fortunately, Mr. Fisher had underinsured motorist coverage under several automobile insurance policies, all with State Farm, for a combined value of $400,000. In September of 2010, Fisher presented his claim to State Farm for uninsured benefits totaling $1.35 Million of damages, which he claimed were incurred as a result of the motor vehicle collision. In February of 2011, State Farm offered to settle Fisher’s UIM claim against it for only $59,572.10. In July of 2011 Fisher filed a Complaint against State Farm alleging, that State Farm had not paid him any uninsured motorist benefits and that it was an unreasonable delay or denial for them not to have paid benefits in violation of C.R.S. § 10-3-1115. At the end of trial, the jury returned a verdict for Fisher and against State Farm in the amount of $780,572. However, the jury also found that State Farm was unreasonable in delaying payment to Fisher for medical expenses totaling $61,125.16. The trial court entered a judgment for Fisher and against State Farm for the $400,000 uninsured motorist limits plus $122,250.32, constituting the statutory penalty doubling the $61,125.16 in medical benefits that the jury found to have been unreasonably delayed.
On May 7, 2015, the Colorado Court of Appeals rejected State Farm’s argument that its failure to pay Fisher’s medical benefits cannot have been unreasonable because State Farm was not legally required to pay Fisher’s UIM claim on a piecemeal basis. The court ruled that neither the statute nor their policy requires that all the claims be established beyond reasonable dispute before a duty to pay some of the claim that is not reasonably in dispute arises. The court further found that it was undisputed that Fisher’s medical expenses for injuries he incurred from the accident were a “covered benefit” under the UIM policy, and notwithstanding the fact that the remainder of Fisher’s UIM claim was for damages other than medical expenses, the court found that under the plain language of C.R.S. § 10-1-1115, State Farm had a duty to not unreasonably delay or deny payment of Fisher’s medical expenses. The court ultimately reasoned that State Farm was legally obligated to not unreasonably delay or deny payment of Fisher’s medical expenses notwithstanding that other components of his UIM claim that may have been subject to reasonable dispute.
The Fisher decision means that in first party claims against your own insurance company, the insurance company has a duty to evaluate any undisputed portion of your claim and pay, if need be, piecemeal. How this is manifestly better for consumers than before the Fisher case is that oftentimes people suffer great financial losses during the pendency of their personal injury claims. It has often been the case that severely injured people take less in settlement value because it is abundantly clear that if they do not, the insurance company will utilize additional delay tactics that can result in financial ruin for the injured insureds. As made clear in Fisher, these stall tactics will no longer be tolerated. Furthermore, Fisher provides support for the standard that insurance companies should promptly resolve and pay on undisputed portions of claims, and then pay the remaining benefits following the submission of additional documentation. The court specifically found that the piecemeal payment of policies in these circumstances was not only warranted, but it would be an unreasonable delay of benefits to not do so.
The Fisher case is groundbreaking on a number of fronts, but the erosion of the insurance company’s virtual chokehold on what has been considered legally mandated delay tactics have been put in checkmate by the Fisher v. State Farm decision.
At Anderson, Hemmat & McQuinn we know that it is important to understand complex legal issues such as UM/UIM coverage. Not understanding UM and UIM coverage can potentially cost you thousands if you are making a claim for injuries. If you have been injured in a car crash and you have questions about your UM/UIM coverage and how that coverage can compensate you, please call and speak with one of our Denver underinsured accident injury attorneys today.