What Can You Do If Your Insurance Claim Is Denied in Colorado?

Dealing with property damage, injury, or illness is stressful enough. When your insurance company adds to that stress by denying your claim, it can feel like a betrayal. You’ve upheld your end of the agreement by paying your premiums—now it’s time for them to uphold theirs. But what happens when they don’t?

Insurance claim denials happen more often than people realize, and not all denials are legitimate. Understanding why insurers issue denials is the first step to challenging one effectively. Common reasons include:

• Policy exclusions: The insurer claims your situation isn’t covered.
• Insufficient documentation: You didn’t provide enough evidence to support the claim.
• Missed deadlines: Claims must be filed within specific timeframes.
• Disputed liability or damages: The insurer doesn’t believe the loss is their responsibility.
• Clerical errors: Sometimes, internal mistakes lead to incorrect denials.

At Littleton Lawyers, we frequently help clients challenge these denials and recover the compensation they’re entitled to. If you’ve been denied coverage, it doesn’t mean your case is over—it means it’s time to take a closer look at your options.

Step 1: Review the Denial Letter Thoroughly

After receiving a denial, your first step should be to review the letter carefully. Colorado law requires insurance companies to provide a written explanation for every claim denial.

When reading your letter, look for:

• Specific reasons for the denial: Does it reference a clear policy provision?
• Technical language: Are they using industry terms or legal jargon to obscure their reasoning?
• Requests for additional information: Are they claiming your claim is incomplete?

If the letter seems vague or confusing, don’t hesitate to ask for clarification. You also have the right to request a full, unredacted copy of your policy if you don’t already have one. The terms of that policy are key to determining whether the denial was lawful.

Step 2: Compare the Denial to Your Policy

Once you have your full insurance policy, compare it to the explanation in the denial letter. This step helps you determine whether the insurer is accurately interpreting the contract—or if they’re trying to avoid payment unfairly.

Focus on these key sections:

• Coverage clauses: What losses are included under your plan?
• Exclusion clauses: Is the denial based on an ambiguous or minor exclusion?
• Claim requirements: Did you meet the policy’s filing timelines and documentation standards?

In Colorado, courts generally interpret unclear policy language in favor of the policyholder. If there’s any uncertainty about whether a loss is covered, the benefit of the doubt often goes to you—not the insurance company. That can be a powerful legal argument if the case proceeds further.

Step 3: File an Internal Appeal with the Insurer

If you believe the denial was issued in error—or if you just want a second review—you can usually file an appeal directly with the insurance company. Most providers allow you to challenge a denial through their internal review process before you pursue legal options.

When preparing your appeal, be sure to include:

• A written statement: Explain why you believe the denial is incorrect.
• Supporting documentation: Add anything that strengthens your case—photos, receipts, repair estimates, expert opinions, and correspondence.
• A copy of the denial letter: Reference it directly and address the points made.
• Relevant policy language: Quote sections of your policy that support your position.

Appeals must usually be submitted within 30 to 60 days of the denial, so don’t delay. Even if the appeal is unsuccessful, it creates a valuable record of your efforts and can serve as evidence if legal action becomes necessary.

Step 4: Know When to Contact an Attorney

If your appeal is denied or the insurance company continues to stall, it may be time to bring in legal help. Some denials are the result of honest disagreement—but others reflect a deeper issue known as “bad faith.”

In Colorado, bad faith insurance practices include:

• Delaying payment of a valid claim without justification
• Failing to conduct a reasonable investigation before denying a claim
• Refusing to communicate or respond to inquiries from the policyholder
• Using vague or shifting reasons for denial

Under Colorado law (C.R.S. § 10-3-1115 and § 10-3-1116), policyholders can sue insurance companies for bad faith and may be awarded:

• The full amount of the original claim
• Double damages for the wrongful denial
• Reasonable attorney’s fees and costs

Littleton Lawyers has helped clients throughout Littleton and across the state pursue compensation in these types of cases. We know how insurers operate—and we know how to challenge their tactics head-on.

Step 5: Take Action Quickly

Insurance claim denials come with deadlines. If you wait too long, you may lose the opportunity to appeal or take legal action altogether. The timeline depends on your specific policy and the nature of the claim, but acting promptly is always in your best interest.

We recommend that you:

• Document everything: Save denial letters, claim forms, emails, and notes from phone calls.
• Create a timeline: Record important dates, including when the claim was filed and when responses were received.
• Consult a lawyer early: Getting legal insight up front can save time and help you avoid costly mistakes.

Insurers often count on people giving up. When you respond quickly and decisively, you take control of the situation and improve your chances of a successful outcome.

You Don’t Have to Accept an Unfair Denial

Having a claim denied can make you feel helpless—but you don’t have to go through it alone. Whether the denial was due to a misunderstanding, a documentation issue, or something more serious like bad faith, you have the right to challenge the decision and demand fair treatment.

Reach out to Littleton Lawyers today to schedule a consultation. We’re proud to help Colorado residents fight back against wrongful insurance denials and recover the compensation they’re owed.