American Family Loses Bad Faith Suit

by editor


An insurance company’s delay in paying for a Colorado woman’s spinal surgery resulted in a hefty bodily injury and bad faith verdict for the insured.

On April 10, a U.S. District Court jury found in favor of Samantha Spokas on her claims that American Family Mutual Insurance Company breached its insurance contract, unreasonably delayed payment of her claim and acted unreasonably in handling the claim, according to the order by Senior U.S. District Judge Wiley Daniel.

The jury found that American Family withheld $490,791.52 in uninsured motorist bodily injury benefits for an artificial disc replacement surgery following a car accident. That award will double, according to state law.

When an insurer unreasonably delays or denies a claim for a covered benefit, the Colorado-based insured can seek twice the covered benefit in district court, plus attorney fees and court costs per Colorado Revised Statutes section 10-3-1116(1).

To read this story and other complete articles featured in the April 27, 2015 print edition of Law Week Colorado, copies are available for purchase online.