Case Overview

In December 2021, a fast-moving wildfire tore through a Colorado community, destroying entire neighborhoods in a matter of hours. One young family — a married couple with a small daughter — evacuated their home with only the clothes on their backs after receiving an emergency call to leave immediately.

While the homes on either side of our clients’ house burned to the ground, their property was left standing. But “standing” didn’t mean safe or livable. It had sustained considerable fire damage, plus extensive damage from heat, pressure, and smoke that had worked its way into nearly every surface, personal property item, and system in the house.

What should have followed was straightforward: a homeowners insurance claim, a fair investigation, and support getting the family back on their feet. Instead, our clients spent the next two years fighting their own insurance company just to get what they were owed under their homeowners insurance policy.

The Insurance Claim

When we took on this case, a review of the insurer’s own claim file revealed a pattern of conduct that went well beyond ordinary claims handling:

• Invasive, irrelevant questioning. Days after the fire, the insurer’s adjuster spent a recorded phone call grilling our client on his Social Security number, his spouse’s age, detailed employment and salary histories for both spouses, bank account balances, credit card standing, and whether he’d ever filed for bankruptcy. None of this had anything to do with evaluating fire damage to a home. It looked far more like an attempt to build leverage or intimidate than to adjust a claim.
• A manufactured coverage excuse. The insurer initially refused to authorize an independent industrial hygienist to test for smoke contamination, citing the policy’s pollutant exclusion. But that exclusion doesn’t apply to smoke damage caused by fire, which is a point that is well established and not a close call under a standard homeowners insurance policy. Denying testing on that basis delayed our clients’ ability to document the true scope of their loss.
• A claim that should have been escalated, but wasn’t. Internal notes showed the insurer recognized early on that a loss of this size, ultimately worth more than half a million dollars, should have been handed to its large-loss claims team. It never was. Instead, it stayed with a single adjuster who was, by the insurer’s own internal assessment, not equipped to handle it.
• A housing commitment that got reversed. The insurer had approved an extended lease term so the family could secure stable temporary housing while their home was repaired. Months later, after the supervisor who approved it left the company, the insurer reversed course, and its adjuster told the family’s housing vendor that no such approval had ever been given. Claim notes told a different story.
• Missing claims-handling standards. Colorado law requires insurers to maintain and produce the internal standards they use to investigate claims. Despite a court order in place to protect any sensitive materials, the insurer was unable to identify or produce any such manual for this claim.

The Financial Toll

By the time we finished reconstructing the insurer’s own payment ledger against what the policy required, the numbers were stark. Tens of thousands of dollars in dwelling and personal property benefits had been unreasonably delayed or withheld. Additional living expense payments, the money meant to keep this family housed while their home was unlivable, were shorted for months. And under Colorado’s unfair claims practices statutes, unreasonably delayed or denied benefits can expose an insurer to a penalty of up to two times the amount at issue, on top of attorneys’ fees.

The Result For The Client

Using the insurer’s own internal notes, recorded calls, and payment records, we built a claim for breach of contract and first-party bad faith under Colorado law (C.R.S. §§ 10-3-1115, -1116, and -1104). Facing that record, the case resolved in mediation for a strong financial recovery for our clients, one that reflected both the benefits they were owed, and accountability for how they were treated along the way.

Why This Case Matters for Homeowners

If you’ve filed a homeowners insurance policy claim after a fire, particularly a wildfire, and something feels off, your insurer may be engaging in bad faith conduct. This could be a request for information that seems unrelated to your damage, a denial that doesn’t square with your policy language, a housing benefit that gets pulled back, or a claim that’s dragging on without explanation. Fortunately, Colorado law gives homeowners tools to hold insurers accountable when that happens.

If your home was damaged by fire and you’re struggling to get your insurance company to honor your policy, we can help. Our firm has deep experience litigating first-party bad faith and coverage disputes against homeowners’ insurers, including claims arising from Colorado wildfires. Contact us for a free consultation to discuss your claim.

This case study is based on an actual matter handled by our firm. Details have been generalized and identifying information changed to protect our clients’ privacy. Prior results do not guarantee a similar outcome, as every claim depends on its own facts and circumstances.