Insurance Claim Denial Appeal - Colorado

FIRST-PARTY INSURANCE CLAIM DENIAL APPEAL — COLORADO

TABLE OF CONTENTS

1. Cover Letter and Header
2. Statement of Claim
3. Statement of Errors in the Denial
4. Coverage and Policy Analysis
5. Demand for Appraisal (Where Applicable)
6. Notice of Statutory Remedies and Time-Limited Demand
7. Document Production Request
8. Reservation of Rights
9. Demand and Conclusion
10. Document Index
11. Signature Block
12. Colorado DOI Complaint Procedure
13. Practice Notes
14. Sources and References

1. COVER LETTER AND HEADER

SENT VIA CERTIFIED MAIL — RETURN RECEIPT REQUESTED, AND VIA EMAIL/CLAIM PORTAL

Date: [__/__/____]

[INSURER NAME]

Attn: Claims Department / Appeals Unit

[ADDRESS]

Re: Formal Appeal of Claim Denial / Underpayment

To Whom It May Concern:

This letter is the formal appeal of the [denial / underpayment / partial denial] of the above-referenced first-party insurance claim. The decision is unsupported by the policy language, the facts, and Colorado law. The Insurer is hereby placed on notice of potential statutory and common-law liability for unreasonable delay or denial of benefits under C.R.S. §§ 10-3-1115 and 10-3-1116 and Travelers Ins. Co. v. Savio, 706 P.2d 1258 (Colo. 1985).

2. STATEMENT OF CLAIM

2.1. The Policy. The Policy is [type] insurance, policy number [POLICY NUMBER], with effective dates [__/__/____] through [__/__/____]. All premiums were timely paid and all conditions precedent to coverage have been satisfied.

2.2. The Loss. On [__/__/____], Insured sustained a covered loss when [describe loss event in detail — e.g., wind/hail damage, vehicle collision, fire, water loss, theft, medical expense]. The loss occurred at [LOCATION], in [COUNTY] County, Colorado.

2.3. Notice and Cooperation. Insured notified Insurer on [__/__/____] and has fully cooperated, including by [submitting proof of loss, providing photographs, attending inspections, sitting for an examination under oath, producing requested documents].

2.4. Damages. The covered loss includes:

• Repair / replacement cost: $[AMOUNT]
• Diminution in value: $[AMOUNT]
• Additional Living Expense / Loss of Use: $[AMOUNT]
• Medical / wage loss (where applicable): $[AMOUNT]
• Total claimed: $[AMOUNT]

2.5. Insurer's Action. On [__/__/____], Insurer issued [a denial letter / partial payment of $AMOUNT / a coverage position letter], citing [summarize stated grounds].

3. STATEMENT OF ERRORS IN THE DENIAL

3.1. Misreading of the Policy. The denial letter relies on [Section / Exclusion] of the Policy. That provision does not, as a matter of plain language and Colorado contract-construction principles, exclude the Loss because [explain]. See Cyprus Amax Minerals Co. v. Lexington Ins. Co., 74 P.3d 294 (Colo. 2003) (ambiguities in insurance contracts construed against the insurer).

3.2. Failure to Investigate. The Insurer's investigation was inadequate in violation of C.R.S. § 10-3-1104(1)(h)(III)–(IV). Specifically, Insurer [failed to inspect, failed to interview witnesses, failed to obtain corroborating records, relied on a single drive-by adjuster review, etc.].

3.3. Reliance on Result-Oriented Experts. The Insurer's retained expert, [NAME of engineer/adjuster], has a documented pattern of authoring reports favorable to insurers and against coverage. The opinion is contrary to the [independent contractor estimate / public adjuster report / treating physician] opinion submitted by Insured.

3.4. Wrongful Application of Exclusions. Insurer relied on [wear-and-tear / earth movement / faulty workmanship / pre-existing condition] exclusion(s), but Colorado follows the [efficient proximate cause / concurrent causation] doctrine; the predominant cause of the Loss was a covered peril.

3.5. Failure to Pay Undisputed Amount. Even assuming the disputed coverage issue, Insurer failed to pay the undisputed portion of the claim, in violation of standards of good faith and the prompt-payment requirements of Colorado law.

4. COVERAGE AND POLICY ANALYSIS

4.1. Insuring Agreement. The Policy's insuring agreement provides: [QUOTE EXACT POLICY LANGUAGE]. The Loss falls squarely within this language.

4.2. Burden of Proof. Under Colorado law, the insured bears the initial burden of establishing a prima facie case of coverage; the insurer bears the burden of proving the applicability of any exclusion. Renfandt v. New York Life Ins. Co., 419 P.3d 576 (Colo. 2018).

4.3. Construction Against Insurer. Ambiguous policy language is construed against the drafter — the insurer. Cyprus Amax Minerals Co. v. Lexington Ins. Co., 74 P.3d 294 (Colo. 2003).

4.4. Reasonable Expectations. Where policy language is ambiguous or where its operation defeats the reasonable expectations of an ordinary insured, those reasonable expectations control. Bailey v. Lincoln Gen. Ins. Co., 255 P.3d 1039 (Colo. 2011).

4.5. Conclusion. The Loss is covered. Any purported exclusion does not, as a matter of law, defeat coverage on these facts.

5. DEMAND FOR APPRAISAL (WHERE APPLICABLE)

5.1. To the extent the parties dispute the amount of loss rather than coverage, Insured invokes the appraisal provision of the Policy and demands appraisal pursuant to [Policy Section/Page] and Colorado regulations governing appraisal procedures (3 CCR 702-5; HB 18-1153 codifying appraiser/umpire procedures).

5.2. Insured names [APPRAISER NAME], [CREDENTIALS], of [ADDRESS], as Insured's appraiser. Insurer is requested to designate its appraiser within twenty (20) days of this letter, after which the two appraisers shall select a competent and impartial umpire as the Policy provides.

5.3. The appraisal will determine the amount of loss only and will not address coverage, causation, or bad faith — issues reserved for the Court. See Auto-Owners Ins. Co. v. Summit Park Townhome Ass'n, 886 F.3d 863 (10th Cir. 2018) (applying Colorado law).

5.4. Appraisal does not waive any of Insured's rights, including rights under C.R.S. §§ 10-3-1115/-1116 and the common law.

6. NOTICE OF STATUTORY REMEDIES AND TIME-LIMITED DEMAND

6.1. Statutory Bad Faith. Insurer is on formal notice that any continued unreasonable delay or denial of payment of benefits subjects it to liability under C.R.S. § 10-3-1116(1) for:

• Two (2) times the covered benefit; and
• Reasonable attorney fees and court costs.

6.2. Common-Law Bad Faith. Insurer is further on notice of potential common-law bad-faith liability under Travelers Ins. Co. v. Savio, 706 P.2d 1258 (Colo. 1985), and exemplary damages under C.R.S. § 13-21-102.

6.3. Prompt-Pay Statutes. Where applicable:

• Auto direct benefits (PIP/MedPay): C.R.S. § 10-4-642 imposes prompt-payment duties and penalties for late payment.
• Health insurance: C.R.S. § 10-16-106.5 requires a "clean claim" to be paid, denied, or settled within ninety (90) days, with 30-day window for additional information; failure triggers 10% statutory interest and a 20% penalty on the amount allowed.

6.4. Time-Limited Settlement Demand. Insured hereby demands, in good faith and based on the documentation submitted, payment of the policy benefit of $[AMOUNT] within [____ — generally not less than 30 days] days from Insurer's receipt of this letter and all supporting documentation referenced herein. This demand is supported by the materials enumerated in Section 10. Failure to tender the demanded amount within the deadline, without a reasonable basis articulated in writing, will be treated as evidence of unreasonable delay or denial under C.R.S. §§ 10-3-1115/-1116.

7. DOCUMENT PRODUCTION REQUEST

Pursuant to applicable claim-file disclosure standards and as a matter of good-faith claims handling, Insured requests within thirty (30) days the following:

• Complete claim file, including all adjuster notes, log entries, and supervisor reviews;
• All photographs, videos, and inspection reports;
• All expert reports, including engineering, medical, vocational, or valuation reports, and the qualifications of each expert;
• All correspondence (internal and external) regarding the claim;
• All policy forms, endorsements, and the declarations page;
• All applicable claims-handling guidelines, manuals, and bulletins;
• Reserve information and reserve-setting documentation;
• The complete underwriting file relating to the Policy.

8. RESERVATION OF RIGHTS

8.1. Insured reserves all rights and remedies under the Policy, Colorado common law (including Savio), Colorado statute (including C.R.S. §§ 10-3-1115, -1116, -1104, -10-4-639, -10-4-642, -10-16-106.5), and applicable federal law.

8.2. Submission of this appeal does not waive any claim, defense, or remedy, including the right to additional damages, consequential damages, attorney fees, and exemplary damages.

8.3. Insured reserves the right to supplement this appeal with additional documentation, expert reports, and argument.

9. DEMAND AND CONCLUSION

For the foregoing reasons, Insured respectfully demands that Insurer:

• ☐ Reverse the denial / underpayment;
• ☐ Pay the policy benefit of $[AMOUNT] plus statutory interest within [____] days;
• ☐ Designate its appraiser within twenty (20) days if the dispute is one of amount;
• ☐ Produce the documents requested in Section 7;
• ☐ Issue a written response to this appeal that complies with C.R.S. § 10-3-1104(1)(h)(V) and applicable regulations.

Failure to act reasonably and in good faith will result in litigation seeking the full statutory remedy under C.R.S. § 10-3-1116 (two times the covered benefit plus attorney fees and costs), common-law contract and bad-faith damages, and exemplary damages where supported by the evidence.

10. DOCUMENT INDEX

11. SIGNATURE BLOCK

Respectfully submitted,

[LAW FIRM NAME]

By: [________________________________]

[ATTORNEY NAME], Atty. Reg. No. [####]

Counsel for [INSURED NAME]

[STREET ADDRESS]

[CITY, COLORADO ZIP]

Telephone: [NUMBER]

E-mail: [EMAIL]

cc: [INSURED]; [CO Division of Insurance — if filing parallel complaint]

12. COLORADO DOI COMPLAINT PROCEDURE

Insured may file a parallel complaint with the Colorado Division of Insurance (DORA). While not a prerequisite to suit, a DOI complaint frequently produces a written response from the insurer that is useful evidence of unreasonable conduct.

The DOI requires the consumer to first attempt resolution with the insurer; this appeal letter satisfies that prerequisite. Attach the denial letter, this appeal, and supporting documentation to the DOI complaint.

13. PRACTICE NOTES

• Statutory remedy is powerful. C.R.S. § 10-3-1116 provides a near-strict-liability remedy of 2x covered benefit + attorney fees on a showing of unreasonable delay/denial. No scienter required. Kisselman v. American Family Mut. Ins. Co., 292 P.3d 964 (Colo. App. 2011).
• Appraisal scope is limited. Appraisal in Colorado generally addresses "amount of loss" only, not coverage or causation. Auto-Owners Ins. Co. v. Summit Park Townhome Ass'n, 886 F.3d 863 (10th Cir. 2018). Reserve coverage and bad-faith issues for the courts.
• Discretionary clauses are void. C.R.S. § 10-3-1116(4) voids any provision in a Colorado-issued policy purporting to reserve interpretive discretion to the insurer.
• Time-limited demands. Use cautiously. Provide a reasonable window (typically 30+ days), full documentation, and be willing to extend in response to a reasonable insurer request. Miel v. State Farm Mut. Auto. Ins. Co., 912 P.2d 1333 (Colo. App. 1995), allows admission of plaintiff/attorney motivation in evaluating reasonableness.
• Auto total-loss claims. C.R.S. § 10-4-639 requires payment of title, sales tax, and transfer/registration fees on total-loss vehicles, and disclosure of valuation methodology. Object to lowball ACV opinions and request the underlying valuation report (e.g., CCC One, Audatex).
• UM/UIM claims. Stacking is permitted in Colorado. C.R.S. § 10-4-609 and DeHerrera v. Sentry Ins. Co., 30 P.3d 167 (Colo. 2001). Verify all available coverages.
• Health prompt-pay penalties. Under C.R.S. § 10-16-106.5, a clean claim not paid within 30 days accrues 10% interest; failure to pay within 90 days triggers a 20% penalty on the amount allowed.
• Limitations. Three-year contract limitations under C.R.S. § 13-80-101(1)(a) generally apply; verify whether the policy contains a shorter contractual limitations period (and whether such period is reasonable and enforceable).
• Document everything. Send via certified mail return-receipt and via the insurer's claims portal. Maintain a chronological log.

14. SOURCES AND REFERENCES

• C.R.S. § 10-3-1104 — https://colorado.public.law/statutes/crs_10-3-1104
• C.R.S. § 10-3-1115 — https://colorado.public.law/statutes/crs_10-3-1115
• C.R.S. § 10-3-1116 — https://colorado.public.law/statutes/crs_10-3-1116
• C.R.S. § 10-4-639 — https://colorado.public.law/statutes/crs_10-4-639
• C.R.S. § 10-4-642 — https://colorado.public.law/statutes/crs_10-4-642
• C.R.S. § 10-16-106.5 — https://colorado.public.law/statutes/crs_10-16-106.5
• 3 CCR 702-5 (Property and Casualty regulations) — https://www.sos.state.co.us/CCR/
• HB 18-1153 (Property Casualty Insurance Claim Appraisal Procedures) — https://leg.colorado.gov/bills/hb18-1153
• Travelers Ins. Co. v. Savio, 706 P.2d 1258 (Colo. 1985)
• Cyprus Amax Minerals Co. v. Lexington Ins. Co., 74 P.3d 294 (Colo. 2003)
• Kisselman v. American Family Mut. Ins. Co., 292 P.3d 964 (Colo. App. 2011)
• Auto-Owners Ins. Co. v. Summit Park Townhome Ass'n, 886 F.3d 863 (10th Cir. 2018)
• Bailey v. Lincoln Gen. Ins. Co., 255 P.3d 1039 (Colo. 2011)
• Colorado Division of Insurance — https://doi.colorado.gov/

Disclaimer: This template is provided for informational purposes only and does not constitute legal advice. An attorney licensed in Colorado must review and customize this document before submission. Laws, regulations, and court rules change frequently; verify all authorities before use.