Colorado Appeals Court Orders Auto Insurer to Pay $36,500 for Failing to Disclose Policy

In most Colorado auto accidents an insurance company ends up paying for the victim’s medical bills and other losses. Indeed, most personal injury claims arising from car accidents are settled out-of-court with the relevant insurance company. To encourage such settlements, Colorado law requires auto insurers to provide a statement to a claimant (upon request) listing any coverage “that is or may be relevant to the claim.”

Such disclosure helps enable the claimant, i.e., the accident victim demanding compensation, to assess the total amount of insurance that may be available to the negligent driver. In turn, this may affect the claimant’s ability to seek compensation from other sources, such as their own uninsured/underinsured motorist coverage. And to “incentivize” insurance companies to provide such statements in a timely manner, Colorado law imposes a fine of $100 per day against any insurer that fails to respond to a claimant’s request for policy disclosure within 30 days.

Timing of Policy’s Purchase Not Grounds for Refusing Disclosure

Recently, the Colorado Court of Appeals, Division I, ordered an insurance company to pay a $36,500 fine for violating the state’s policy disclosure mandate. The interesting thing about this case, Bohanan v. Esurance Property & Casualty Insurance Co., is that the insurer failed to disclose a policy that did not actually cover the accident in question. Nevertheless, the appeals court agreed with a trial judge that the disclosure requirement still applied.

Here is what took place. The plaintiff sustained injuries when a negligent driver ran a red light and collided with the plaintiff’s vehicle in an intersection. This occurred at 7:20 a.m. in the morning. About 90 minutes later, at 9:03 a.m., a third party purchased auto insurance coverage from Esurance naming the negligent driver as an additional insured.

The plaintiff promptly retained a personal injury lawyer, who in turn sent written notice to Esurance requesting a statement of any coverage that may be relevant to the accident. Thirty-six days later, Esurance informed the attorney it was denying coverage because the policy was purchased after the accident occurred. Critically, Esurance did not provide a copy of the policy.

This led to the plaintiff’s lawsuit against Esurance. She maintained that Esurance’s denial of coverage did not absolve it of the statutory duty to disclose the policy. The Court of Appeals agreed with that position, noting that despite any “factual uncertainties” as to when the policy took effect, “the statute unambiguously required Esurance to provide [plaintiff’s] counsel with a copy of the policy within thirty days of the date its registered agent received the request.”

More to the point, Esurance failed to produce the policy for 356 days. As such, the Court of Appeals determined the insurer owed the statutory fine of $100 for each of those days. That brought the total fine to $35,600.

Contact a Grand Junction Car Accident Lawyer

Even a seemingly cut-and-dry car accident can lead to legal disputes over seemingly minor issues. That is why it is best to work with a qualified Grand Junction car accident attorney who can handle these details on your behalf. Call Killian, Davis & Richter, PC, today at 970-241-0707. We serve clients in Grand Junction, Montrose and Mesa County, Colorado.

Source:

scholar.google.com/scholar_case?case=15383059836259097529