Colorado Supreme Court clarifies path for proving insurers' unreasonable delay of benefits
The
Under state law, insurers cannot unreasonably delay or deny payment on a claim. The
In the case of
However, in a
"Although, as GEICO argues, non-economic damages tend to involve greater subjectivity than other types of damages like medical expenses," Gabriel elaborated, "we decline to conclude, as a matter of law, that such damages (or a portion thereof) can never be undisputed."
Lawyers for Fear and GEICO did not immediately respond to a request for comment.
The case attracted the attention of outside groups who weighed in to the Supreme Court and took away differing impressions of the opinion.
On the one hand, an attorney for the insurance industry called the decision a rejection of "a cynical attempt" from plaintiffs' lawyers to etch insurers' internal estimates in stone.
"In today's common-sense decision, the
However,
"Among other things, the Court recognized that an auto insurer's evaluation of its insured's noneconomic damages can be relevant in an insurance bad faith case," he said.
In Fear's case, he received neck, back and head injuries from his accident. The responsible driver's insurance company paid Fear
Fear then sought additional benefits from his own insurer, GEICO, arguing his injuries exceeded
In 2021,
A three-judge panel of the
"Internal evaluations like the one that GEICO completed in this case are not intended to confine the fact finder to a particular range of damages, or even to inform its decision-making process," wrote Judge
During oral arguments in November, the Supreme Court heard about the dynamics of insurance settlements and how a ruling could upend that process. If insurance companies did not immediately pay policyholders the minimum amount shown by their calculations, for example, they could risk a lawsuit for unreasonably delaying "undisputed" damages.
If that were the case, observed Gabriel, "every insurance company would run their number as 'zero to X.' And then you're stuck with, 'I guess the undisputed number is zero.' That makes no sense."
Ultimately, the Supreme Court decided GEICO's internal estimate of Fear's damages could not be used in court to show how much he was owed — a win for the insurance industry. But, in a benefit for policyholders and contrary to the
"Accordingly, insurers may not shield themselves from liability simply by disputing the value of a particular benefit; the dispute must have a reasonable basis," Gabriel added.
The
The case is Fear v.



Photos | With laughter, this was Luigi Mangione’s attitude as he pleaded not guilty to the murder of the multimillionaire CEO in the USA.
Ask the Medicare Specialist
Advisor News
- Strong underwriting: what it means for insurers and advisors
- Retirement is increasingly defined by a secure income stream
- Addressing the ‘menopause tax:’ A guide for advisors with female clients
- Alternative investments in 401(k)s: What advisors must know
- The modern advisor: Merging income, insurance, and investments
More Advisor NewsAnnuity News
- ALIRT Insurance Research: U.S. Life Insurance Industry In Transition
- My Annuity Store Launches a Free AI Annuity Research Assistant Trained on 146 Carrier Brochures and Live Annuity Rates
- Ameritas settles with Navy vet in lawsuit over disputed annuity sale
- NAIC annuity guidance updates divide insurance and advisory groups
- Retirement is increasingly defined by a secure income stream
More Annuity NewsHealth/Employee Benefits News
- AFP-NH COMMENDS HOUSE FOR REJECTING HEALTH CARE TAX
- Kansas state employees retain choice of Blue Cross, Aetna for health insurance
- CONGRESSWOMAN TENNEY CALLS ON DOJ TO INVESTIGATE NEW YORK'S PLAN TO USE MEDICAID FOR AUTOMATIC VOTER REGISTRATION
- Health insurance legislation signed into law by Reynolds
- Researchers from Virginia Commonwealth University Report on Findings in Substance Abuse (Health insurance type moderates the association between substance use disorders and cardiovascular multimorbidity among U.S. adults – Results from the 2023 …): Addiction Research – Substance Abuse
More Health/Employee Benefits NewsLife Insurance News
- AI emerges as the biggest risk for financial leaders in 2026
- 5 steps to take before selling your firm
- Bismarck man pleads guilty to taking out insurance policy on dead wife
- ALIRT Insurance Research: U.S. Life Insurance Industry In Transition
- U-Haul Holding Company Schedules Fourth Quarter Fiscal Year End 2026 Financial Results Release and Investor Webcast
More Life Insurance News