What Every Florida Property Insurance Policyholder Should Know About Bad Faith
Insurance companies are supposed to provide financial protection and peace of mind by honoring their policy commitments. However, when insurers fail to act in good faith, policyholders may face undue stress and economic hardship. Understanding the signs of bad faith insurance practices can help you identify when an insurer is acting improperly and take appropriate action. This blog examines common indicators of bad-faith behavior by insurance companies and guides how policyholders can address these issues.
What Is Bad Faith Insurance?
Ever feel like your insurance company is ghosting you? When they ignore valid claims, delay payments, or flat-out lie, that might be bad faith.
- First-Party Bad Faith: When an insurance company refuses to investigate correctly, underpays, or wrongfully denies a policyholder’s claim.
- Third-Party Bad Faith: When an insurer fails to protect its policyholders from liability, it exposes them to financial losses beyond their policy limits.
The Legal Obligation of Insurance Companies
Insurers in Florida must act in good faith. That means responding promptly, investigating fairly, and paying valid claims. When they don’t, they may be breaking the law.
Bad Faith vs. Simple Claim Denial
Not every denial is bad faith. But if your claim was strong and they still denied it without good reason, or dragged their feet, they may be acting in bad faith.
Common Signs of Bad Faith
Watch out for these red flags that might indicate bad faith:
- Unreasonable Delays: Taking months to respond to your claim or process payments without a valid reason.
- Lowball offers: These involve offering a settlement far below the value of your loss.
- Denial Without Explanation: Rejecting your claim without a detailed, policy-based reason.
- Ignoring Evidence: Dismissing photos, repair estimates, or expert reports you provide.
- Requesting Excessive Documentation: Asking for unnecessary paperwork to stall the process.
If you notice these behaviors, document everything—dates, conversations, and correspondence—as this can strengthen a potential bad-faith case.
Florida’s Legal Framework for Bad Faith Insurance Claims
Statutory Bad Faith: Florida Statute § 624.155
Florida’s primary statute governing bad faith insurance is Florida Statute § 624.155, which allows policyholders to take legal action against insurers who:
- Fail to settle a claim in good faith when it could and should have been done
- Violate provisions of the Florida Insurance Code, such as deceptive practices, claim delays, or failing to act promptly on claims.
Before filing a bad faith lawsuit, the policyholder must submit a Civil Remedy Notice (CRN) to the Florida Department of Financial Services and give the insurer 60 days to cure the violation. If they fail, the claimant can proceed with a lawsuit.
Common Law Bad Faith
In addition to the statutory route, Florida courts recognize common law bad faith, especially in third-party liability cases. When an insurer exposes its insured to excess judgments by refusing to settle within policy limits, that can trigger a bad faith cause of action.
Types of Claims That Often Involve Bad Faith Practices
Bad faith claims can arise from a wide range of insurance disputes, including:
Homeowners Insurance Claims
- Denied or delayed hurricane damage claims
- Underpaid fire, roof, or water damage claims
- Mold exclusions are improperly applied
Auto Insurance Claims
- Denial of uninsured motorist (UM) benefits
- Failure to settle personal injury claims
- Disputes over vehicle damage valuation
Commercial Insurance Claims
- Business interruption claims denied without a valid reason
- Delays in processing property or liability losses
- Denials based on ambiguous policy terms
Why Is Hiring a Florida Insurance Lawyer Important?
Our experienced Florida insurance claim lawyers can provide significant advantages when dealing with bad-faith insurance:
- Expert Evaluation: We can assess whether the insurer’s actions constitute bad faith and provide guidance on the best course of action.
- Effective Negotiation: Our job is to negotiate with insurers and advocate for a fair settlement on your behalf.
- Legal Representation: If necessary, we can represent you in court or legal proceedings, pursuing remedies for bad faith and protecting your rights.
- Guidance on Procedures: An attorney can guide you through the legal process, including filing a Civil Remedy Notice and understanding Florida’s insurance laws.
Frequently Asked Questions About Bad Faith Insurance in Florida
What is the difference between a claim denial and bad faith?
Not every denial is bad faith. Bad faith involves dishonest or unreasonable behavior, not just a simple mistake or disagreement.
How long do I have to file a bad faith lawsuit in Florida?
Generally, you have five years from the date of the insurer’s bad faith conduct to file a lawsuit, but it’s best to act quickly.
Can I still file a bad faith claim if my initial claim was paid?
A bad faith claim may still apply if the insurer unreasonably delayed payment or used deceptive tactics that caused additional damage.
Need Legal Help for a Florida Bad Faith Insurance Claim?
If you’re struggling with a delayed, denied, or underpaid property insurance claim in Florida, don’t let your insurance company take advantage of you. Insurance companies are legally required to handle claims fairly, and you have rights when they don’t.
Contact Williams Law, P.A. today for a free consultation. Our experienced Florida bad-faith insurance attorneys fight for policyholders facing unfair claim denials and insurance company misconduct. Call 1-800-451-6786 to protect your rights and get the settlement you deserve.