Signs an Insurance Company Is Acting in Bad Faith

What Legally Constitutes Bad Faith Insurance Under Florida Law?

Florida recognizes two categories of insurance bad faith affecting policyholders differently.

First-Party Bad Faith occurs when your own insurance company:

• Wrongfully refuses to investigate your claim properly
• Deliberately underpays covered losses without a reasonable basis
• Denies valid claims without adequate investigation or justification
• Violates Florida Statute § 627.70131 claim handling timelines
• Misrepresents policy terms to avoid paying legitimate claims

This most commonly affects Florida homeowners’ insurance claims for hurricane, fire, water, and roof damage, as well as commercial property insurance claims.

Third-Party Bad Faith arises when an insurance company:

• Refuses to settle third-party claims within policy limits when reasonable
• Fails to defend policyholders adequately in lawsuits
• Places insurer’s financial interests above policyholder protection
• Exposes policyholders to excess judgment liability

Florida Statute § 624.155 requires you to submit a Civil Remedy Notice (CRN) to the Florida Department of Financial Services and provide your insurer 60 days to cure violations before filing a lawsuit.

How Is Bad Faith Different from Breach of Contract?

Breach of Contract occurs when an insurer fails to fulfill contractual obligations:

• The insurer honestly but incorrectly believed the claim wasn’t covered
• Damages limited to policy benefits plus attorney fees
• No recovery of consequential damages or punitive damages

Bad Faith involves malicious intent or deliberate deception:

• The insurer knew or should have known the claim was valid
• Denial or underpayment lacked any reasonable basis
• Damages include policy benefits plus consequential damages, emotional distress, and attorney fees
• Potential for punitive damages to punish egregious misconduct

Florida courts allow policyholders to pursue both claims simultaneously when insurer conduct supports both theories.

Do Florida Commercial Property Insurance Claims Face Bad Faith Tactics?

Florida commercial property insurance claims frequently involve bad faith practices affecting business owners, condominium associations, homeowners associations, and commercial property owners. Business interruption claims represent particularly problematic areas where insurance companies routinely deny coverage by misinterpreting policy coverage triggers, disputing whether physical damage is sufficient to trigger business interruption coverage, refusing to cover losses during necessary repair periods, undervaluing lost income and continuing expenses, requiring excessive documentation that businesses cannot provide during crisis periods, and delaying evaluations while businesses suffer ongoing financial losses.

Commercial property damage claims encounter bad faith through tactics including disputing whether damage resulted from covered causes or exclusions, applying improper valuations that don’t reflect actual replacement costs for commercial properties, refusing to cover loss of rents when tenants vacate damaged buildings, denying code upgrade costs necessary to bring older commercial buildings into current code compliance, and imposing sub-limits or limitations that violate policy language or Florida law. Condominium association claims suffer from insurers claiming defective construction caused damage rather than covered storm events, refusing to cover common area damage affecting multiple units, disputing which damage falls within association coverage versus individual unit owner policies, and denying water intrusion claims by mischaracterizing damage sources.

Commercial liability claims face third-party bad faith when insurers refuse to settle claims within policy limits despite clear liability, fail to defend insureds in lawsuits properly, breach duties to communicate settlement offers, place insurer interests above policyholder interests in litigation strategy, and expose policyholders to excess judgments through unreasonable settlement refusal. Florida’s complex commercial insurance policies and substantial values involved in commercial claims make experienced legal representation essential when business owners and commercial property owners face claim denials or underpayments.

Can Auto Insurance Claims in Florida Involve Bad Faith Conduct?

Florida auto insurance claims encounter bad faith practices affecting both first-party claims by policyholders and third-party claims by accident victims seeking recovery from at-fault drivers’ insurers. Uninsured motorist (UM) and underinsured motorist (UIM) claims commonly involve bad faith when insurers deny coverage by disputing whether the at-fault driver was actually uninsured or underinsured, misinterpreting UM/UIM policy provisions to reduce coverage, refusing to conduct good faith investigations of accident circumstances and injuries, offering inadequate settlements that don’t compensate for serious injuries, and employing delay tactics. At the same time, injured policyholders need medical treatment and income replacement.

Personal injury protection (PIP) claims under Florida’s no-fault insurance system face bad faith through unreasonable denial of medical treatment coverage, improper application of policy limitations and exclusions, refusing to accept medical necessity determinations from treating physicians, demanding independent medical examinations with biased doctors who routinely deny treatment necessity, and delaying payment for emergency medical treatment. Property damage claims for vehicle damage often face lowball settlement offers based on inappropriate valuation methods, refusals to pay for rental vehicles during repairs, disputes over whether vehicles are total losses or repairable, and undervaluation of total-loss vehicles through incomplete market comparisons.

Third-party auto liability claims involve bad faith when at-fault drivers’ insurance companies refuse to settle injury claims within policy limits despite clear liability and damages exceeding coverage, fail to properly investigate accidents and communicate findings to policyholders, prioritize insurer financial interests over policyholder protection from excess liability, breach duties to defend policyholders in lawsuits, and expose policyholders to judgments exceeding policy limits through unreasonable settlement rejection.

While auto insurance bad faith claims are less common than property insurance bad faith claims in our practice, Florida drivers and accident victims facing unreasonable claim denials or inadequate settlements should consult experienced insurance litigation attorneys to evaluate whether a bad faith claim is warranted.

What Are the Most Common Warning Signs of Insurance Bad Faith in Florida?

Is My Insurance Company Unreasonably Delaying My Florida Property Claim?

Florida Statute § 627.70131 establishes specific timeframes insurers must follow:

Required Florida Insurance Claim Timelines:

• 14 days to acknowledge receipt of your claim
• 90 days to pay or deny your claim after receiving all documentation

Common Delay Tactics Indicating Bad Faith:

• Receiving repetitive excuses without concrete reasons
• Adjusters who “go silent” for weeks or months
• Repeatedly canceled inspection appointments
• Taking months to review contractor estimates
• Deliberately understaffing claims departments after hurricanes
• Failing to provide claim status updates despite requests

Consequential Damages from Delays:

• Additional property deterioration from continued water intrusion
• Mold growth requiring expensive remediation
• Temporary housing costs during displacement
• Mortgage obligations on uninhabitable properties
• Lost business income for commercial properties

Why Is My Insurance Company Offering Less Than My Actual Damages?

Lowball settlement offers are classic bad-faith tactics, particularly after hurricanes and other severe weather events.

Warning Signs of Bad-Faith Lowball Offers:

• Settlement amounts below multiple contractor estimates
• Offers excluding entire categories of covered damage
• Excessive depreciation makes repairs unaffordable
• Valuations based on software estimates, ignoring actual conditions
• Missing code upgrade costs required for compliance
• Pressure to “accept now before the offer expires”
• No detailed explanation of how amounts were calculated

Common Tactics for Florida Storm Claims:

• Undervaluing roofing systems with improper depreciation
• Claiming storm damage resulted from pre-existing conditions
• Excluding wind-driven rain damage covered under wind coverage
• Refusing complete roof replacement when matching isn’t possible

Can My Insurance Company Deny My Claim Without Written Explanation?

No. Florida Statute § 627.4137 requires detailed written explanations when denying claims:

Required in Denial Letters:

• Specific facts supporting the denial decision
• Identification of specific policy provisions excluding coverage
• Enough detail that policyholders understand the reasoning

Inadequate Denials Suggesting Bad Faith:

• Generic “not covered under your policy” without explanation
• Vague references to exclusions without explaining why they apply
• Claims of “wear and tear” without supporting evidence
• Failure to identify which policy provisions support denial

Is My Insurance Company Misrepresenting My Florida Policy Coverage?

Policy misrepresentation constitutes egregious bad faith when insurers deliberately twist policy language to avoid paying claims.

Common Misrepresentation Tactics:

• Telling you something isn’t covered when policy language clearly provides coverage
• Citing exclusions that don’t apply to your type of loss
• Claiming limitations or sub-limits that don’t exist
• Violating Florida’s requirement that ambiguities favor policyholders

Florida Hurricane and Property Insurance Misrepresentations:

• Claiming hurricane wind damage isn’t covered because it involved “wind-driven rain.”
• Asserting water damage isn’t covered when it resulted from covered wind damage
• Denying mold remediation when the mold resulted from covered water damage
• Mischaracterizing “flood” definitions to exclude covered water damage

Did My Insurance Company Fail to Investigate My Claim Properly?

Florida law requires prompt, thorough, and complete investigations before making coverage decisions.

Signs of Inadequate Investigation:

• Claim denials issued before any adjuster inspected the property
• Adjusters spend only minutes inspecting extensive damage
• Refusing follow-up inspections when additional damage appears
• Relying exclusively on aerial photographs without ground inspection
• Ignoring engineering reports documenting covered damage
• Failing to test for hidden damage like moisture intrusion

Why Does My Insurance Company Keep Requesting the Same Documents?

Unreasonable documentation requests indicate bad faith when used to delay claims rather than gather necessary information.

Unreasonable Request Tactics:

• Requesting tax returns or financial records unrelated to property damage
• Demanding receipts already submitted multiple times
• Continually moving goalposts after compliance
• Requiring documentation that doesn’t exist
• Failing to explain why documents are necessary

How These Tactics Serve Bad Faith:

• Creates frustration, causing policyholders to abandon claims
• Manufactures excuses for delays, violating statutory timelines
• Shifts blame to supposedly uncooperative policyholders

Is It Bad Faith If My Insurance Company Threatens or Intimidates Me?

Yes. Threatening behavior constitutes bad faith and violates Florida law.

Threatening and Intimidating Behavior:

• Threatening to cancel your policy if you pursue your claim
• Stating you won’t recover anything if you reject offers
• Suggesting you committed fraud without evidence
• Warning that hiring an attorney will slow your claim
• Using aggressive, hostile, or abusive language

Florida law prohibits unfair claim settlement practices, including threats. Documented threats provide compelling evidence in bad-faith litigation, often resulting in punitive damages.

What Types of Florida Insurance Claims Most Often Involve Bad Faith?

Are Florida Homeowners’ Insurance Claims Frequently Subject to Bad Faith?

Yes. Florida homeowners’ insurance claims are plagued by rampant bad-faith practices, particularly after hurricanes.

Most Common Bad Faith Claims:

Hurricane Damage Claims:

• Misclassifying hurricane damage as flood damage
• Improper wind versus water damage allocations
• Claiming damage resulted from pre-existing conditions
• Refusing to cover wind-driven rain intrusion

Roof Damage Claims:

• Refusing replacement by claiming wear and tear
• Applying excessive depreciation
• Requiring partial matching when complete replacement is needed
• Refusing code upgrade costs

Water Damage Claims:

• Claiming water damage resulted from flooding
• Asserting mold exclusions eliminates all water damage coverage
• Refusing to cover hidden water damage

Fire Damage Claims:

• Disputing total loss determinations
• Undervaluing personal property losses
• Denying additional living expenses

Do Florida Commercial Property Insurance Claims Face Bad Faith?

Yes. Commercial claims frequently involve bad faith affecting business owners and associations.

Business Interruption Claims:

• Misinterpreting coverage triggers
• Disputing whether physical damage triggers coverage
• Undervaluing lost income and continuing expenses
• Requiring excessive documentation during a crisis
• Delaying evaluations while businesses suffer losses

Commercial Property Damage:

• Applying improper valuations for replacement costs
• Refusing loss of rent coverage
• Denying code upgrade costs
• Undervaluing business personal property

Condominium Association Claims:

• Claiming defective construction caused damage
• Refusing standard area damage coverage
• Denying water intrusion claims
• Failing to evaluate construction defect claims properly

How Can I Protect Myself and Build a Strong Bad Faith Case?

What Documentation Should I Keep for Florida Insurance Claims?

Documentation provides your strongest weapon against insurance bad faith.

 Communication Records:

• Date and time of every call, email, text, or portal message
• Names and titles of all insurance representatives
• Detailed conversation summaries
• What was promised and what reasons were given

Property Damage Documentation:

• Photos and videos of all damage from multiple angles
• Documentation immediately after loss and during repairs
• Date stamps on all photos and videos

Financial Documentation:

• All contractor estimates and engineering reports
• Receipts for emergency repairs and expenses
• Invoices for temporary housing
• Proof of lost wages or business income

Official Correspondence:

• Copy of insurance policy with all endorsements
• All letters from your insurance company
• Denial letters with stated reasons
• Settlement offers with breakdowns

Claim Timeline:

• Chronological log from loss date through resolution
• Documentation of each delay and excuse
• Pattern evidence of repeated misconduct

Why Is My Insurance Company Offering So Much Less Than My Actual Damages?

Lowball settlement offers that are significantly below your actual repair costs represent classic bad-faith tactics that insurance companies employ throughout Florida, particularly for hurricane, roof, and water damage claims. Insurance companies make inadequate offers, hoping policyholders lack the expertise to recognize that the offers don’t cover actual damages, need money urgently, and will accept insufficient settlements, or will become frustrated and give up on their claims. When insurers offer settlements without providing detailed justification, refuse to explain how they calculated offered amounts, or cannot provide a credible basis for rejecting contractor estimates and engineering reports, their conduct suggests bad faith.

Warning signs of bad faith lowball offers include settlement amounts that don’t match multiple contractor estimates for necessary repairs, offers that exclude entire categories of covered damage without valid policy basis, depreciation deductions that exceed reasonable amounts or apply to non-depreciable items, claim valuations based on software estimates that don’t account for actual property conditions, failure to include code upgrade costs required to bring repairs into building code compliance, and claims adjusters pressuring you to accept settlement “before it’s too late” or “before the offer expires.” These tactics particularly affect Florida homeowners dealing with roof damage claims, as insurers frequently undervalue roofing systems by applying excessive depreciation, using incorrect roofing material costs, or claiming that hurricane damage actually resulted from pre-existing conditions or wear and tear.

Florida law requires insurance companies to pay the full amount necessary to repair or replace covered property damage according to policy terms. When insurers deliberately undervalue claims to reduce payouts, they violate the duty of good faith and fair dealing.

Should I Accept Settlement Offers from My Florida Insurance Company?

Exercise extreme caution before accepting settlement offers.

Before Accepting:

• Obtain independent contractor estimates
• Compare offers to independent valuations
• Read all releases carefully, understanding what rights you waive
• Consult Williams Law Association, P.A., expert Florida insurance claim lawyers

Warning Signs to Reject Offers:

• Offers 20% or more below contractor estimates
• Overly broad release language waiving unknown claims
• Pressure tactics urging immediate acceptance
• Partial payments do not address all damage
• Offers made before thorough investigations

Many Florida homeowners accept inadequate settlements under financial pressure, losing tens of thousands in unreimbursed expenses. Our firm offers free consultations to evaluate settlement offers before you accept them.

Contact Tampa’s Experienced Bad Faith Insurance Attorneys Today

Don’t let insurance companies deny you the coverage you paid for. If your Florida insurance company unreasonably delayed your claim, offered inadequate settlement, denied your claim without explanation, misrepresented coverage, failed to investigate properly, or used threatening tactics, you may have a bad faith claim under Florida Statute § 624.155.

Call us today at 1-800-451-6786 or contact us online for a free consultation with our experienced Florida bad faith insurance attorneys. We’ll evaluate your claim, explain your legal rights, and fight to recover your full policy benefits plus bad faith damages, including consequential damages, attorney fees, and punitive damages when appropriate.

At Williams Law Association, P.A., we’ve spent nearly 30 years fighting for Florida homeowners and business owners facing insurance company misconduct. We’ve recovered millions for clients across Tampa, St. Petersburg, Clearwater, and throughout Florida whose insurers wrongfully denied or underpaid legitimate claims for hurricane, fire, and water damage, as well as other covered losses.

Our Tampa office serves policyholders throughout Hillsborough, Pinellas, Pasco, Polk, Manatee, Sarasota, and surrounding counties. You paid your premiums expecting protection when disaster struck. Contact Williams Law Association, P.A. today for aggressive representation against insurance bad faith.