With less than sixty days until the one-year anniversary of the most expensive hailstorm in Colorado history which hammered west metro Denver on May 8, 2017, many individuals, business owners, and community associations members continue the difficult task of negotiating with insurance companies in an effort to return property to pre-storm conditions.

Whether it be an inadequate repair scope, application of damage thresholds that do not exist within the policy, failure to provide for local code or ordinance requirements, communication breakdowns, refusal to pay general contractor overhead and profit, withholding covered benefits, improper claims handling, or simply not providing enough funds to realistically complete repairs, it is important to understand not only the legal recourse available to policyholders in Colorado, but also the time period in which an action can be brought against an insurance company in Colorado for failure to pay covered benefits.

Colorado requires that any action against an insurance company for failure to pay covered benefits must be brought within three years of the date of loss. This time period begins to run from the date of the event causing damage, not from the date that the damage is discovered. Colorado unfortunately allows insurance companies to reduce this time period to as little as six months in commercial and business owner insurance policies. Failing to identify the period in which legal action may be brought under the policy, especially considering the significant amount of damage resulting from the May 8, 2017 hailstorm, can ultimately lead to the inability to seek legal recourse where an insurance company is failing to pay covered benefits.

Colorado law also allows policyholders to bring a cause of action for bad faith where an insurance company unreasonably delays or denies the payment of covered insurance benefits.1 This law allows policyholders to potentially recover two times the covered insurance benefits not paid, or that were paid after an unreasonable delay. There is currently an unsettled debate as to whether a policyholder must bring this claim within one year from the date of the storm—in this case, May 8, 2018.

If you have been affected by the May 8, 2017, hailstorm and feel that your insurance company is not properly handling your loss, you should contact a Colorado licensed attorney experienced in coverage litigation.
1 Colorado Revised Statute § 10-3-1115 and § 10-3-1116.