Does the 2 year Statute of Limitations apply? In what state would I file suit?

I had extensive damage to a tooth after biting into a bone fragment. The tooth could not be saved and was pulled. Another tooth started to hurt shortly after the tooth was pulled. The dentist did a crown and root canal on that one. He stated that the problem was caused by the missing tooth. I live in California -it happened in Colorado. Both companies are in Illinois. The food company and the insurance company verbally told me that my expenses would be paid. I sent the insurance company everything that was requested of me. The injury occurred on February 1, 2010. Around February 26, 2012 the insurance company told me that the claim had been denied because the Statute of Limitations had run out on February 1, 2012. I believe that they committed fraud against me. They failed to process my claim. I relied upon their verbal agreement that they would cover all of my expenses. I have paid the bill -just over $6000. Is there anything that I can do?