Florida Insurance Bad Faith

Florida’s “bad faith” allows an insured person or someone who has been injured by an insured person to recover damages from an insurance company for its failure to settle a claim in good faith when the insurer could and should have done so.   

Generally, there are two types of Bad Faith: First Party and Third Party.  First party bad faith, a creation of the courts, is when your insurer commits bad faith against you directly when not settling a claim in good faith.  For example, you have a fire that burns your entire home down and your insurance company fails to settle your claim and you incur other damages not covered under your policy or beyond your policy limits you would not have incurred otherwise.  Third party bad faith, a creation of Florida Statute, is when another person’s insurer fails to settle a claim in good faith for damages you have from that other person.  For example, you are involved in a car wreck and you are injured by the fault of another person, their insurer fails to settle your claim and you incur additional damages that you would not have incurred otherwise.

A bad faith insurance claim arises out of a contract dispute.  By purchasing a policy and paying the premium, insureds are entering a contract with the insurer, who in turn promises to act in good faith and with fair dealing. That means they need to uphold their own policy provisions and the policyholders’ rights to receive that policy’s benefits. 

As a policyholder, you are obligated to fulfill your payments and cooperate with an insurer. Likewise, your insurer has an obligation to handle your claim in a fair and timely manner. When an insurance company fails to uphold their end of the contract, then a policyholder may be able to hold them accountable through a bad faith claim.  A policyholder can file a legal claim against their insurance company for the damages that should have been paid and additional damages.

Examples of conduct that constitutes bad faith insurance:

• Your claim was denied without a valid explanation
• Your insurer refuses to investigate your claim (or in a timely manner)
• Your insurer intentionally misrepresented the terms of your coverage
• Your insurer is unnecessarily prolonging your settlement
• Your insurer knowingly offers less than what your policy covers

Bad faith claims most often stem from:

• Unnecessary claim delays. Insurers are required to process claims in a reasonable amount of time and without needless delays.
• Policy cancellations. We have seen cases where an insured files a claim, and the insurer immediately starts scouring their history for errors or any misrepresentation that might void the policy. This is really common when it comes to death benefits claims. Sometimes, it is for something as benign as a misspelled name – even though they had no problem collecting the monthly premium despite this error.
• Misrepresentations of policy. Some insurers will attempt to avoid paying claims by mischaracterizing the terms, requirements, and policy provisions. Many insurance policies are crafted with complex language and insider jargon, much of which favors the insurer. But it is well understood that any ambiguity is supposed to be construed in favor of the policyholder. Our experienced bad faith insurance attorneys can help.
• Ambiguous policy exclusions. Insurance policies can have all kinds of exclusions. But if an exclusion is ambiguous, it should be decided in the claimant’s favor.
• Denying paying for a valid claim with no reasonable basis. Insurers have a responsibility to pay valid claims and offer a reasonable basis when they deny them. Failure to do so may be bad faith. The same goes for low-ball settlement offers that are not justified.
• Low settlement offers which are often made without justification and for the benefit of the insurance companies bottom line and without regard for the insured.

These are just a few possible bases for a Florida bad faith insurance claim.  Of course, denials may be valid in some cases, but working with an experienced lawyer at the outset of your claim may help ensure your rights are enforced correctly and timely.

If you are having trouble resolving a claim and believe that your insurer is not acting in good faith, you have options.  Call our firm and learn more about what we can do to help you. All work is done on a contingency fee basis - we do not charge legal fees unless we recover money for you.  Contact us to schedule your free initial consultation by calling (786) 395-1148 or emailing richard@middaghlaw.com.