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Offsets and Stacking: How Colorado’s Uninsured and Underinsured Insurance Laws Work.

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Offsets and Stacking: How Colorado’s Uninsured and Underinsured Insurance Laws Work

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Accidents happen all the time, often resulting in serious, traumatic injuries. In the best case scenario, any and all drivers involved are carrying auto insurance that will cover damages to all who are involved. Unfortunately, some people drive without insurance— in Colorado 16% of all drivers.

Still other drivers are insured, but their policy limits aren’t enough to cover the extent of victims’ injuries—which, in industry, parlance is called an “underinsured” motorist. Then there’s the case of the hit-and-run, where Colorado ranks 10th in the nation, which leaves victims with no one to pursue for injury-related costs.

Enter uninsured/underinsured motorist coverage (UM/UIM). This coverage steps in to cover damages you would have received if the at-fault driver had been fully insured. Colorado has specific laws regarding how insurance companies may calculate payments owed, which involve the concepts of “offsets” and “stacking,” discussed more fully below.

UM/UIM Coverage

In Colorado, all auto insurance companies are required to offer UM/UIM coverage as part of every policy. Policyholders may refuse such coverage in writing when they buy their coverage.

Your UM/UIM coverage kicks in if you are involved in an accident—as a driver, pedestrian or cyclist—with a motorist who is uninsured, underinsured or cannot be identified. That latter category is important— 60 percent of hit-and-run cases involving serious bodily injury in Colorado are dismissed by the courts because the fleeing driver cannot be found.

Can your coverage be “offset” by the at-fault driver’s policy?

No. Your Colorado insurance companies cannot offset (i.e., reduce) the amount a company pays to its insured, by the amount paid by the at-fault driver’s insurance company. Instead, the insurance company is obligated to pay up to the insured’s UM/UIM policy limits.

Is “stacking” permitted in Colorado?

Yes. Combing policies—known as “stacking” multiple policies onto multiple vehicles—is allowed. As of January 1, 2008, Colorado insurance companies cannot include “anti-stacking” language in policies to prevent individuals from stacking, thereby reducing the total amount available. In other words, if you are paying premiums on three separate $100,000 UM/UIM policies for three vehicles, you may “stack” them for $300,000 in coverage total.

If you’ve been injured by an uninsured, underinsured or unknown driver, send us a message or give us a call at (303) 575-9390 today to make sure your rights are protected.

Levin Sitcoff, PC Named 2019 U.S. News-Best Lawyers “Best Law Firm”

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Levin Sitcoff, PC has been ranked nationally and regionally on the list of 2019 U.S. News – Best Lawyers® “Best Law Firms” in the following practice areas:

The U.S. News – Best Lawyers “Best Law Firms” rankings are based on a rigorous evaluation process that includes the collection of client and lawyer evaluations, peer review from leading attorneys in their field, and review of additional information provided by law firms as part of the formal submission process. To be eligible for a ranking in a particular practice area and metro region, a law firm must have at least one lawyer who is included in Best Lawyers in that particular practice area.

Levin Sitcoff, PC founding partner named to 2018 Barrister’s Best, Barrister’s Choice

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We are pleased to announce Bradley A. Levin has been included in the Law Week Colorado 2018 Barrister’s Best “Barrister’s Choice” as Best Insurance Attorney – Plaintiffs.

The Barrister’s Best list recognizes lawyers who are deemed “the best of the best” by their peers in Denver’s legal community and the editors of Law Week Colorado.

State Farm v. Fisher Opens Up a New Theory of Liability: Delay paying undisputed benefits is itself an act of Bad Faith

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Establishing delay, in both the claims and litigation phase, under this theory was discussed by Nelson Waneka in the firm’s recent webinar on the case:

“In Fisher, the medical payments that State Farm refused to pay were undisputed. In practice, the question becomes, how do you get that established aside from an admission? Brad Levin and I think it starts in the claims stage.

“We think it’s important to get the insurance company to take a position. It’s just our opinion, but we think it’s a good one, that insurance companies must face their statutory duties under 10-4-609 as well as their duties under the policy to ascertain and pay benefits as well as their duty to investigate. We think they have an obligation to determine what the damages are, and that doesn’t just mean general damages. That’s something we see a lot of now. In the UIM claim, you present your claim, your bills and other evidence. Then the insurance company comes back and says, ‘Oh, well, we found $50,000 in general damages.’  What does that mean? Can an insurance company in order to get around Fisher just create a bucket of numbers, say, $50,000? What we do is try to get them to take a position during the claims stage with letters saying, it’s your obligation to tell me, to determine what my damages are, not just general damages but each category of them. And then we try to find where the dispute is and where it isn’t.

“It doesn’t really matter in our mind what the insurance company does.  If they refuse to tell you what your damages are or break it down into categories, we think that then goes into the bad faith theory which is: Why are you not telling your own insurer what their damages are? If they do take a position, I think it is all the more easy to establish that something was not disputed or was disputed.

“So it starts in the claims stage.

“The next stage would be during litigation using written discovery and ideally after that a 30(b)(6) depositions to lock down their position on damages. We notice our 30(b)(6) depositions with each category of damages and what items were disputed or not disputed. We then go in there with each bill or item of evidence and ask – did you dispute this? If you did, why? This makes it easier to really establish for purposes of this theory of liability what was disputed and what wasn’t, and if the insurance company trying to ignore undisputable damages in the hope of just resolving the claim on a global basis. We think that’s the big import of Fisher.”

Colorado: What it Means and Why Your Defense Lawyer Tells You to Hire Personal Counsel

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Whether it’s a personal injury claim over a car accident or a malpractice claim against you as a professional, being served with a lawsuit is never a pleasant experience. Your mind may spin with the possibilities of losing your money, assets or professional license.

Your first step is to notify your insurance company of the lawsuit so it can review your coverage. In some cases you will receive a reservation of rights letter, which states the insurer agrees to defend you, but reserves the right to withdraw as to part or all of the claims, and that your insurer retains a lawyer of its choosing and pays for your legal representation.

Should you also hire personal counsel—your own attorney—to represent your interests when that occurs?

As of early 2018, no Colorado court has ruled on the question of whether an insurance company must provide outside counsel for its insured, but, in many situations—even if it’s not recommended to you—yes, you should consider hiring an attorney for the reasons discussed below.

Note that retaining personal counsel is especially important for professionals such as lawyers, doctors, engineers, accountants, etc. who are fighting malpractice claims. In fact, the Colorado Court of Appeals has held that, in professional malpractice claims, the defense counsel provided to them by their insurer must recommend that the client retain personal counsel.

Why hire personal counsel?

An insurance company’s attorney is paid by the insurer to act on behalf of the company’s financial and legal interests, not those of the insured (you). And although these interests often fully overlap, they can sometimes be at odds. With an attorney you have chosen and paid for, you can be sure someone is working hard to protect only you.

Your personal counsel’s duty is to get the best result for you and only you. Your lawyer can monitor every step of the case and inform you if the insurance company’s planned course of action has diverged from your interests. Personal counsel is particularly advisable if your case involves potentially uncovered claims or the insurance company disagrees as to the amount of available coverage.

Moreover, if you are potentially responsible for a verdict in excess of your policy limits, an amount for which you might be personally liable, hiring an attorney now could mitigate that risk as well. Having personal counsel may alos help you preserve the ability to obtain insurance coverage in the future.

Another situation in which personal counsel is useful is if an insurance company attempts to withdraw from defending you in the middle of case. With your own representation already in place, your attorney can step in immediately.

Above all, personal counsel can help preserve your recourse against the insurance company. This personal attorney may record all negotiations and communications between the plaintiff and the insurance company, document all decisions regarding legal motions filed and so on. If the insurance company has acted in a way that results in an adverse outcome for you, your attorney can help you hold the insurer responsible.

Can your business lawyer serve as personal counsel?

Technically, any lawyer can serve as your personal counsel, but an attorney experienced in insurance litigation can make a big difference in the outcome.

As noted above, for professionals involved in malpractice suits, outside counsel is a must. Having an attorney with experience in the highly specialized area of insurance coverage law is essential. With your assets, reputation, and possibly your entire practice on the line, having someone who knows how to best represent your interests is crucial.

If you’re facing a lawsuit and think you might need to retain personal counsel to protect yourself and your interests, send us a message or give us a call at (303) 575-9390.

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LEVIN | SITCOFF PC

1512 Larimer Street Suite 650
Denver, CO 80202
Phone: 303-575-9390
Fax: 303-575-9385
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Disclaimer: The information contained throughout this site is meant to provide a basic understanding of insurance bad faith law including insurance coverage, bad faith first party, bad faith third party, personal counsel, appellate, expert witness, serious bodily injury, disability, ERISA, and disability, professionals. This information is not meant to be taken as legal advice and does not establish an attorney-client privilege.
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