New Colorado Insurance Law that Improves Your Coverage

McDivitt Law Firm attorneys work hard each day to represent the best interests of our clients and fight against injustice of any kind. Recently, one of our attorneys, Edward Lomena, took a case all the way to the Colorado Court of Appeals. Upon its ruling, his efforts introduced new case law and set a precedent that will protect consumers across the state when it comes to their insurance coverage.

Lomena presented that our client was erroneously denied coverage during the time of his accident, due to a mistake on the part of his insurer. This issue arose in the recent case of Michael D. Brown v. American Standard Insurance of Wisconsin.

Why Our Client was Denied Coverage

Our client was notified by his insurance company that his coverage was canceled due to not having a valid drivers license. Shortly after this, our client was in a motorcycle accident. Although our client acknowledged that he received the notice of cancellation prior to the accident, he was able to prove that he did, in fact, have a valid driver’s license during the time of the accident.

Here is a timeline to help provide a clear look of how the events that unfolded:

  • August 20, 2014: Client receives notice of canceled policy due to not having a valid driver’s license.
  • September 6, 2014: Client is involved in an accident while driving a motorcycle.

Because Mr. Brown did not have coverage, he only recovered a minimal amount from the at-fault driver. McDivitt Law Firm made a claim against his insurer, American Standard for underinsured motorist benefits. American Standard Insurance denied the claim, stating that Mr. Brown’s policy was canceled prior to the accident.

How McDivitt Law Firm Responded to the Denial

We filed a bad faith claim on behalf of Mr. Brown against American Standard arguing that the cancellation of the policy was ineffective because it was based on inaccurate information. More specifically, that Mr. Brown had a valid Colorado driver’s license at the time of the cancellation.

Although our client did, in fact, have a valid license, American Standard Insurance’s position was that there was no coverage on the date of the accident due to the notice of cancellation. The court ruled that since the reason for cancelation of coverage was inaccurate, the cancellation was not valid, and our client was still covered by the insurance company during the accident.

New Colorado Insurance Law

This decision by the court has now set a precedent for future cases in Colorado that might deal with similar circumstances. It is now Colorado law that cancellation of a policy must be due to accurate information, otherwise, the cancellation is ineffective. Based on this Ruling, Mr. Brown is covered for this accident and will get his day in court.

In addition, all Colorado drivers are better protected due to Mr. Brown’s desire to see his case through, and McDivitt Law Firm’s attorney Edward Lomena working hard to make sure the insurance company did what was right.

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