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In State Farm Mutual Automobile Insurance Company v. Dale Fisher, the Colorado Supreme Court determined whether auto insurance companies must pay undisputed aspects of UIM claims while other portions of claims are disputed.

Dale Fisher, the plaintiff in the case, was struck by an underinsured motorist. Due to the injuries caused by the accident, Fisher accrued $61,125 in medical expenses. Fisher, who was not at fault in the accident, was covered under multiple UIM (underinsured motorist) policies with State Farm Insurance (State Farm). State Farm concluded that the medical bills were “reasonable, necessary and causally related to the car accident.”

While State Farm agreed that Fisher’s medical bills were covered by the policies, it disputed other amounts, such as lost wages. State Farm did not pay Fisher’s medical bills because other parts of the claim were in dispute.

Fisher filed a lawsuit against State Farm after it refused to pay his medical bills, alleging that it unreasonably delayed paying these expenses. State Farm argued that it did not have to make partial payments, even for the undisputed amounts, while the rest of the claim was in dispute.

A jury found that State Farm was in violation of C.R.S section 10-3-115 by denying these benefits. C.R.S section 10-3-115 states “A person engaged in the business of insurance shall not unreasonably delay or deny payment of a claim for benefits owed to or on behalf of any first-party claimant.” State Farm appealed the decision, but the appellate court affirmed. State Farm filed a petition to have the Colorado Supreme Court review the court of appeals decision.

The Colorado Supreme Court held that auto insurers have a duty to not delay or deny covered benefits, even if part of the claim is in dispute. State Farm failed to pay Fisher’s medical expenses, even though they were covered, because it disputed other parts of the claim. As such, the 10th Circuit Court of Appeals and Colorado Supreme Court affirmed the decision of the lower courts.

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