Insurance Companies Are Not Your Friend
A 91-year-old Waldo Canyon fire refugee filed suit after she was left without enough insurance coverage to rebuild her home due to a negligently drafted policy — a bad faith insurance case handled by our firm.
In an eight-page lawsuit filed March 14 in 4th Judicial District Court, Velma Rose alleged that she approached William David Beadles, her insurance agent of six years, in October 2011 and asked if he could match monthly premiums being offered by a competitor.
What Happened To Velma Rose
Rather than raise her deductible as requested, the suit alleged that Beadles lowered Rose’s fire coverage to the point she could not afford to rebuild after her home burned to the ground on June 26 in the Parkside at Mountain Shadows subdivision. The house at 2525 Mirror Lake Court was purchased in 2005 for $180,000, according to El Paso County Assessor’s records.
Beadles was named as a defendant along with State Farm Fire and Casualty Co. A Denver-based spokeswoman for State Farm declined to comment on the pending legal action. “We value all of our customers’ privacy, and as such we adhere to our State Farm privacy policy that we don’t speak to the specifics of any claim,” Angela M. Thorpe said in a written statement.
The lawsuit sought at least $100,000 and marked one of many examples of legal disputes between insurance companies and clients in the wake of the Waldo Canyon blaze, which destroyed at least 346 homes in Colorado Springs’ western foothills and killed an elderly couple.
Rose and her son, Ken Rose, were neighbors who each lost their homes. Ken Rose also co-owned his mother’s house and was a co-plaintiff in the lawsuit.
How The Coverage Fell Short
Prior to the policy change, Rose carried at least $150,000 in fire coverage. According to her attorney, Terry Rector of Rector Stuzynski Law Firm, Beadles dropped the policy to $122,000 — and Colorado Springs home builders would not agree to build a comparable home on her property at that price.
A mortgage lender would typically have flagged insufficient fire coverage, but Rose and her son owned the home outright with no lender monitoring whether the house was sufficiently insured in the event of a fire.
Rector said Velma Rose wanted to reduce her monthly expenses and was never told that her coverage was being reduced to accommodate that request.
“It’d be like saying, ‘I want a homeowner’s policy for my house but make sure if it burns down there won’t be enough money to rebuild,'” Rector said.
The lawsuit alleged breach of contract, breach of fiduciary responsibility, and breach of good faith and fair dealing. Rose had been living in a rental home since the Waldo Canyon fire, with the aid of a monthly stipend provided by her State Farm policy, which the insurance company had notified her would be discontinued.
A Personal Message From Our Attorneys
Attorney Terry Rector, himself a victim of the Waldo Canyon fire, offered the following perspective on what fire victims face when dealing with their insurance companies:
“As a victim myself, I have become far more educated on homeowner’s insurance and coverage issues. Most people who suffered a total loss from the fire on June 26, 2012 were underinsured on their home. As a result, they can only rebuild or replace their dwelling by spending or borrowing money on top of their coverage. There is no apparent remedy. However, review all your available coverages with an expert who has your interest in mind. Your insurance adjuster is not always accurate in the correct interpretation of the amount of money you have available. This is all a chore because the victim of the Waldo Canyon fire has to prove the losses. You are alone here. Your interests are not being protected by the insurance adjuster no matter how friendly they may be, or by your builder. If you feel you are not receiving the benefits under your homeowner’s policy or are not being treated fairly by your insurance company, contact a qualified attorney for a legal review.”
Contact Our Colorado Springs Bad Faith Insurance Attorneys
If you feel you are not receiving the full benefits you are owed under your homeowner’s policy, or if your insurance company is delaying, denying, or undervaluing your claim, our Colorado Springs bad faith insurance attorneys are here to help. Under Colorado law, insurers who unreasonably delay or deny valid claims can be held liable for twice the covered benefit plus attorney fees. Call us today at (719) 578-1106 for a free consultation. We are available 24/7 and ready to fight for what you are owed.
