Insurance DOI Complaint and Bad-Faith Demand — Colorado

Insurance DOI Complaint and Bad-Faith Demand (COLORADO)

Quick-Reference Summary

Part A — DOI Complaint Cover Letter

[SENDER NAME / LAW FIRM LETTERHEAD]
[Street Address]
[City, State ZIP]
Telephone: [____________]
Email: [____________]
Colorado Atty. Reg. No.: [____________]

Date: [__/__/____]

Via U.S. Mail and Online Submission (Consumer Portal)

Colorado Division of Insurance
Department of Regulatory Agencies
Attn: Consumer Services Section
1560 Broadway, Suite 850
Denver, CO 80202
[email protected]

RE: REQUEST FOR INVESTIGATION — Unreasonable Delay/Denial of First-Party Benefits in Violation of C.R.S. §§ 10-3-1104, 10-3-1115, and 10-3-1116

Dear Consumer Services Team:

I submit this complaint on behalf of the above-named Insured under C.R.S. § 10-1-128 and the Division's complaint process, and request that the Division open an investigation into the claim-handling conduct of [INSURER NAME] for unreasonable delay and/or denial of first-party insurance benefits in violation of C.R.S. §§ 10-3-1104(1)(h), 10-3-1115, and the Unfair Claims Settlement Practices provisions of Colorado law.

1. Claim Summary. On [__/__/____], the Insured sustained a covered loss consisting of [DESCRIBE]. The Insured timely reported the loss, fully cooperated with the investigation (including [submitting proof of loss / sitting for EUO / providing documentation requested]), and complied with all conditions precedent under the Policy.

2. Specific Acts of Unreasonable Delay or Denial. [INSURER] has engaged in the following conduct, each of which constitutes unfair claims handling and/or unreasonable delay or denial under C.R.S. § 10-3-1104(1)(h) and § 10-3-1115:

☐ Failure to acknowledge the claim with reasonable promptness (§ 10-3-1104(1)(h)(II))
☐ Failure to adopt and implement reasonable standards for prompt investigation (§ 10-3-1104(1)(h)(III))
☐ Refusal to pay claims without conducting a reasonable investigation (§ 10-3-1104(1)(h)(IV))
☐ Failure to affirm or deny coverage of claims within a reasonable time after proof of loss (§ 10-3-1104(1)(h)(V))
☐ Failure to attempt in good faith to effectuate prompt, fair, and equitable settlement where liability is reasonably clear (§ 10-3-1104(1)(h)(VI))
☐ Compelling insured to litigate to recover amounts due by offering substantially less than amounts ultimately recovered (§ 10-3-1104(1)(h)(VII))
☐ Misrepresenting pertinent facts or policy provisions (§ 10-3-1104(1)(h)(I))
☐ Failure to promptly provide reasonable explanation of basis in policy for denial or compromise offer (§ 10-3-1104(1)(h)(XIV))
☐ Other: [____________________________________]

3. Specific Facts (with dates).

[Detailed chronological narrative — dates, names of adjusters/supervisors, communications, inspections, expert reports, internal reserves if known, low-ball offers, etc.]

4. Requested Action. The Insured respectfully requests that the Division:

(a) Open an investigation under C.R.S. § 10-1-203 and the Unfair Claims Settlement Practices provisions;
(b) Require [INSURER] to provide a complete written explanation within the 20-day response window;
(c) Determine whether [INSURER]'s conduct violates C.R.S. § 10-3-1104 and § 10-3-1115;
(d) Direct payment of wrongfully delayed/denied benefits in the amount of $[__________];
(e) Impose such regulatory remedies — including fines, cease-and-desist orders, and required self-audit — as the Commissioner deems appropriate under C.R.S. § 10-3-1108; and
(f) Provide the Insured with a copy of [INSURER]'s response and all communications.

5. Enclosures (☐):

☐ Executed Authorization for release of claim file
☐ Copy of Policy declarations page
☐ Proof of loss / sworn statement
☐ All denial / partial-pay / reservation-of-rights letters
☐ Communications log
☐ Estimates, expert reports, photographs
☐ Demand letter (Part B, sent contemporaneously to Insurer)

This complaint is submitted without prejudice to the Insured's right to file a private action under C.R.S. § 10-3-1116 and the common-law tort of bad faith breach of insurance contract (Goodson).

Respectfully submitted,

[ATTORNEY NAME]
Counsel for [CLAIMANT NAME]

Part B — Bad-Faith Demand Letter to Carrier

[SENDER NAME / LAW FIRM LETTERHEAD]

Date: [__/__/____]

Via Certified Mail, Return Receipt Requested, No. [____________]
And Via Email to: [____________]

[CLAIMS MANAGER NAME / GENERAL COUNSEL]
[INSURER FULL LEGAL NAME]
[Street Address]
[City, State ZIP]

RE: STATUTORY AND COMMON-LAW BAD-FAITH DEMAND — Colorado First-Party Insurance
Insured: [CLAIMANT FULL NAME]
Policy No.: [____________] Claim No.: [____________]
Date of Loss: [__/__/____]
Covered Benefit in Dispute: $[__________]

Dear [Claims Manager]:

This firm represents [CLAIMANT NAME] ("Insured") in connection with the above-referenced claim. This letter serves as a formal demand for payment of all wrongfully delayed and/or denied benefits under the Policy, together with statutory damages under C.R.S. § 10-3-1116 and common-law bad-faith damages under Goodson v. American Standard Insurance Co. of Wisconsin, 89 P.3d 409 (Colo. 2004).

FORWARD IMMEDIATELY TO YOUR BAD-FAITH UNIT, COVERAGE COUNSEL, AND EXCESS CARRIER.

I. Policy and Loss

II. The Insured's Performance

The Insured has performed every condition precedent under the Policy, including:

☐ Timely notice of loss
☐ Sworn proof of loss
☐ Cooperation in investigation (including EUO if requested)
☐ Production of requested documentation
☐ Premium fully paid

III. The Insurer's Unreasonable Conduct

Under C.R.S. § 10-3-1115(1)(a), "[a] person engaged in the business of insurance shall not unreasonably delay or deny payment of a claim for benefits owed to or on behalf of any first-party claimant." Section 10-3-1115(2) defines "unreasonable" as conduct "without a reasonable basis." Whether conduct is reasonable is judged on the information reasonably available to the insurer at the time. See Etherton v. Owners Ins. Co., 829 F.3d 1209 (10th Cir. 2016); Fisher v. State Farm Mut. Auto. Ins. Co., 419 P.3d 985 (Colo. App. 2015).

[INSURER]'s conduct includes, without limitation:

IV. Damages Under Colorado Law

The Insured is entitled to recover all of the following:

Note: The two-times-benefit recovery under § 10-3-1116 does not require proof of actual damages beyond the covered benefit, and may be recovered even if the benefit is ultimately paid. See Rooftop Restoration, Inc. v. Am. Family Mut. Ins. Co., 418 P.3d 1173 (Colo. 2018).

V. Demand

Within thirty (30) days of delivery of this letter, [INSURER] must:

1. Pay the full covered benefit of $[__________];
2. Pay the statutory penalty of $[__________] (two times the covered benefit) under C.R.S. § 10-3-1116;
3. Pay accrued attorney fees and costs in the amount of $[__________];
4. Confirm in writing that no further conditions, releases, or set-offs will be imposed beyond ordinary policy release of the specific claim; and
5. Preserve all claim-file materials (see Section VI).

If [INSURER] fails to fully comply by [__/__/____], the Insured will file suit in the District Court, [____________] County, Colorado, seeking all available statutory, common-law, and punitive remedies. A regulatory complaint has been filed with the Colorado Division of Insurance contemporaneously with this letter.

VI. Document Preservation / Litigation Hold

[INSURER] is on formal notice to preserve and not destroy, alter, or overwrite any document, ESI, or tangible thing relating to this claim, including:

☐ Complete claim file (paper and electronic, including all versions)
☐ Adjuster diary / activity log / claim notes
☐ Reserve history and reserve change documentation
☐ All internal communications (email, IM, Teams/Slack, recorded calls)
☐ Supervisor/management review notes and authority requests
☐ Retained-expert reports, drafts, and correspondence
☐ Claims handling manuals, bulletins, and training materials in effect during claim period
☐ Underwriting file
☐ Reinsurance communications
☐ Audit/QA reviews of this claim
☐ Backups, archives, and cloud copies of any of the above

Spoliation may result in adverse-inference instructions and sanctions under C.R.C.P. 37 and Pfantz v. Kmart Corp., 85 P.3d 564 (Colo. App. 2003).

VII. Reservation

This letter is sent without prejudice to all rights and remedies of the Insured, expressly including claims for breach of contract, statutory unreasonable delay/denial under C.R.S. § 10-3-1116, common-law bad faith under Goodson, violations of the Colorado Consumer Protection Act where applicable, and any federal claims. Nothing herein waives the Insured's right to additional damages discovered through litigation.

Respectfully submitted,

[ATTORNEY NAME]
Colorado Atty. Reg. No. [______]
Counsel for [CLAIMANT NAME], Insured

cc: ☐ Insured ☐ File ☐ Colorado Division of Insurance ☐ Co-counsel

Part C — Pre-Filing Checklist

Threshold

☐ Confirm Insured is a "first-party claimant" under C.R.S. § 10-3-1115(1)(b)(I) (not a third-party liability claimant; not a non-participating provider)
☐ Confirm the Policy is not an ERISA-governed plan (otherwise § 10-3-1116 is preempted as to delay claims — see Timm v. Prudential)
☐ Confirm covered benefit is "owed" under the Policy (interpret coverage broadly; ambiguities against insurer per Cyprus Amax Minerals Co. v. Lexington Ins. Co., 74 P.3d 294 (Colo. 2003))

Statute of Limitations

☐ Calendar 1-year SOL for § 10-3-1116 statutory penalty (C.R.S. § 13-80-103(1)(d))
☐ Calendar 2-year SOL for common-law bad-faith tort (C.R.S. § 13-80-102(1)(a))
☐ Calendar 3-year SOL for breach of insurance contract (C.R.S. § 13-80-101(1)(a))
☐ Note: each act of unreasonable delay is a discrete trigger (Rooftop Restoration, 418 P.3d 1173)

Documentation

☐ Complete claim file requested in writing
☐ Policy declarations, endorsements, and full policy obtained
☐ Proof of loss filed and date-stamped
☐ Communications log with dates, names, and substance for every contact
☐ Estimates, photographs, expert reports preserved
☐ Insured's damages (consequential, emotional distress) documented
☐ Internal-reserve information sought via interrogatories during litigation

Procedural

☐ DOI complaint filed via Consumer Portal (https://gov.sircon.com/portalAccess.do?service=consumerPortal) — retain Complaint ID
☐ Demand letter sent by certified mail AND email
☐ Litigation hold issued to Insurer and any TPA/IA
☐ Excess/umbrella carriers identified and noticed if applicable
☐ Coverage opinion obtained from independent counsel (especially for complex coverage disputes)
☐ Considered cumulating common-law Goodson claim AND statutory § 10-3-1116 claim AND breach of contract
☐ Considered Colorado Consumer Protection Act § 6-1-105 (if conduct is "unfair or deceptive" outside the insurance-specific statutes; narrow application)
☐ Verified Insurer's registered agent via Colorado Secretary of State (https://www.coloradosos.gov/biz/BusinessEntityCriteriaExt.do)

Discovery Targets (in litigation)

☐ Claim file (entire — Hawkins v. State Farm, 56 F. Supp. 2d 1188 (D. Colo. 1999))
☐ Reserves history (relevance to reasonableness — Silva v. Basin Western, Inc., 47 P.3d 1184 (Colo. 2002))
☐ Internal claims-handling guidelines and bulletins
☐ Training materials and adjuster authority limits
☐ Comparable-claim handling pattern (other Colorado claims)
☐ Reinsurance communications (where relevant to coverage position)

Pre-Send

☐ Removed all <!-- GUIDANCE --> comments
☐ Filled all bracketed placeholders
☐ Reviewed by Colorado-licensed counsel
☐ Calendared 30-day response deadline
☐ Calendared SOL dates

Sources and References

• Colorado Division of Insurance — File a Complaint: https://doi.colorado.gov/for-consumers/file-a-complaint
• Colorado DOI Consumer Portal: https://gov.sircon.com/portalAccess.do?service=consumerPortal
• Downloadable DOI Complaint Form: https://doi.colorado.gov/sites/doi/files/documents/Complaint%20Form%20-%20Request%20for%20Assistance%20-%20Division%20of%20Insurance.pdf
• C.R.S. § 10-3-1104 (Unfair methods of competition and unfair or deceptive acts): https://leg.colorado.gov/sites/default/files/images/olls/crs2023-title-10.pdf
• C.R.S. § 10-3-1115 (Improper denial of claims): https://law.justia.com/codes/colorado/title-10/article-3/part-11/section-10-3-1115/
• C.R.S. § 10-3-1116 (Remedies for unreasonable delay or denial): https://law.justia.com/codes/colorado/title-10/article-3/part-11/section-10-3-1116/
• Goodson v. American Standard Ins. Co. of Wisconsin, 89 P.3d 409 (Colo. 2004)
• Kyle W. Larson Enterprises, Inc. v. Allstate Ins. Co., 305 P.3d 409 (Colo. App. 2012)
• Rooftop Restoration, Inc. v. Am. Family Mut. Ins. Co., 418 P.3d 1173 (Colo. 2018)
• Etherton v. Owners Ins. Co., 829 F.3d 1209 (10th Cir. 2016)
• Fisher v. State Farm Mut. Auto. Ins. Co., 419 P.3d 985 (Colo. App. 2015)
• Timm v. Prudential Ins. Co. of Am., 259 P.3d 521 (Colo. App. 2011) (ERISA preemption)
• United Policyholders — Colorado Consumer Rights: https://uphelp.org/claim-guidance-publications/insurance-consumer-legal-rights-in-colorado/
• Colorado Secretary of State Business Search: https://www.coloradosos.gov/biz/BusinessEntityCriteriaExt.do

This template is provided by ezel.ai for general informational purposes only. It does not constitute legal advice. Colorado bad-faith law evolves rapidly; verify all citations and recent case law and consult a Colorado-licensed attorney before sending. Last updated: 2026-05-21.