When an insurance company denies a claim, delays payment, or offers substantially less than the amount needed to repair covered property damage, policyholders may question whether the insurer is acting in bad faith. However, Florida insurance bad faith is a specific legal issue that involves more than an incorrect claim decision or an inadequate settlement offer.
Under Florida law, insurance bad faith generally concerns an insurer’s failure to fulfill its legal duty to act fairly and honestly toward its insured when handling and resolving claims. The applicable standard examines whether the insurance company attempted to settle a claim when, under all the circumstances, it could and should have done so.
For Florida homeowners, the distinction matters. An insurance company may wrongfully deny hurricane damage, underestimate the cost of roof repairs, or refuse to pay for covered water damage without automatically creating a separate, legally actionable bad-faith claim.
A wrongful denial may establish grounds for a breach-of-contract lawsuit, while a statutory bad-faith action requires additional proof and compliance with Florida’s procedural requirements.
At Williams Law Association, P.A., our attorneys represent Florida homeowners, businesses, condominium associations, and other policyholders in complex property insurance disputes. We investigate unsupported coverage decisions, challenge inadequate claim evaluations, and pursue benefits owed under applicable insurance policies.
Understanding what legally constitutes insurance bad faith can help policyholders recognize potentially improper claim-handling practices without confusing an ordinary coverage dispute with a separate statutory violation.
How Does Florida Law Define Insurance Bad Faith?
Florida’s primary statutory framework for insurance bad faith is found in Florida Statute § 624.155. Under § 624.155(1)(b)(1), an insurer may face civil liability for failing to attempt in good faith to settle a claim when, considering all the circumstances, it could and should have done so had it acted fairly and honestly toward its insured and with due regard for the insured’s interests.
This standard examines the insurance company’s handling of the claim rather than focusing exclusively on whether its final coverage determination was correct.
For example, an insurer may deny a homeowners insurance claim because it believes the damage resulted from an excluded condition. If the available evidence supports that conclusion and the insurer conducted a reasonable investigation, the denial does not necessarily establish bad faith.
A different concern may arise when an insurer refuses to consider credible evidence that contradicts its findings meaningfully, misrepresents material policy provisions, or fails to attempt settlement when its obligation to do so is sufficiently established under the circumstances.
However, not every investigative deficiency or unfavorable claim decision satisfies the statutory standard.
Florida law expressly provides that mere negligence alone is insufficient to constitute insurance bad faith. The insurer’s conduct must be evaluated under the applicable legal requirements and the circumstances of the individual claim.
What Is the Difference Between Insurance Bad Faith and Unfair Claim-Settlement Practices?
Florida law addresses both statutory insurance bad faith and certain unfair claim-settlement practices, but the two concepts should not automatically be treated as interchangeable.
Florida Statute § 626.9541 identifies prohibited insurance practices, including specified failures involving claim investigations, communications, material misrepresentations, and explanations for coverage decisions.
For example, potentially improper practices may involve denying claims without conducting reasonable investigations, failing to adopt adequate investigation standards, misrepresenting pertinent facts or policy provisions, and failing to provide required explanations for denials.
Some unfair claim-settlement practices are subject to statutory requirements involving the frequency of conduct and whether it indicates a general business practice.
Florida Statute § 624.155 authorizes civil remedies for certain specified violations of § 626.9541. However, not every unfair practice identified in Florida insurance law automatically gives rise to a private cause of action for statutory bad faith.
The relevant statutory provision, the elements of the alleged violation, the available remedy, and the procedural prerequisites must be considered.
For homeowners, this distinction reinforces the importance of examining both the underlying insurance coverage dispute and the insurer’s conduct throughout the adjustment process.
What Are Examples of Insurance Bad Faith in Florida?
Insurance bad faith may involve an insurer’s failure to handle or resolve a claim fairly and honestly, including conduct that violates Florida Statute § 624.155 or certain unfair claim-settlement practices identified in Florida Statute § 626.9541.
Examples of insurance company conduct that may raise bad-faith concerns include:
Denying a Claim Without a Reasonable Investigation
An insurer may deny hurricane-related roof damage by attributing the loss to deterioration without adequately inspecting the property or evaluating evidence of storm damage. A denial based on an incomplete investigation may raise concerns about the insurer’s compliance with its claim-handling obligations.
Misrepresenting Insurance Coverage
An insurance company may incorrectly represent that a policy exclusion eliminates coverage for water damage, roof repairs, or other losses. Misrepresenting material facts or applicable policy provisions may constitute an unfair insurance practice under Florida law.
Unreasonably Delaying Claim Decisions or Payments
Repeatedly postponing inspections, requesting previously submitted documents, or failing to explain prolonged delays may raise concerns about compliance with Florida’s insurance claim-handling requirements, particularly when the insurer has sufficient information to evaluate the loss.
Ignoring Evidence Supporting a Covered Loss
An insurer may maintain a denial or an inadequate settlement despite receiving credible engineering reports, photographs, or contractor estimates that contradict its original findings. Although insurers are not required to accept every expert opinion, failing to consider material evidence may reasonably warrant legal scrutiny.
Failing to Attempt a Good-Faith Settlement
An insurer may violate Florida’s statutory good-faith obligations when it fails to attempt settlement despite circumstances indicating that it could and should have done so, acting fairly and honestly toward its insured.
These examples do not automatically establish legally actionable insurance bad faith. Florida law requires an evaluation of the insurer’s conduct, supporting evidence, and applicable statutory requirements. However, these practices may provide grounds to challenge a wrongful denial, substantial underpayment, or improper claim-handling decision.
For additional examples, read our guide to identifying potential bad faith in Florida hurricane insurance claims.
Does an Insurance Company Act in Bad Faith by Denying a Valid Claim?
Wrongfully denying a covered insurance claim does not automatically constitute bad faith under Florida law. An insurer may breach its contractual obligations without necessarily meeting the separate legal requirements for statutory bad faith.
For example, an insurance company may deny hurricane-related roof damage by attributing the loss to deterioration or pre-existing conditions. However, an independent engineering evaluation may establish that the damage resulted from covered hurricane winds.
If the evidence establishes that the insurer wrongfully withheld benefits owed under the policy, the homeowner may have grounds to pursue a breach-of-contract lawsuit.
A separate bad-faith claim requires additional legal analysis, including whether the insurer fulfilled its duty to act fairly and honestly toward the policyholder. Under Florida Statute § 624.1551, certain property insurance bad-faith actions also require an adverse court adjudication establishing breach of contract and entry of a final judgment or decree.
Importantly, homeowners do not have to prove bad faith by the insurer to challenge a wrongful denial or recover benefits owed under their policies.
What Is the Difference Between Breach of Contract and Insurance Bad Faith?
A breach-of-contract lawsuit generally concerns whether the insurance company failed to pay benefits required under the insurance policy. A statutory bad-faith action concerns whether the insurer’s conduct violated Florida’s applicable good-faith obligations.
Consider a homeowner who sustains $180,000 in covered hurricane damage but receives only $45,000 after the insurer excludes necessary roof and interior repairs.
The homeowner may pursue a contractual claim to establish whether additional benefits are owed.
A separate bad-faith action requires additional proof under Florida Statute § 624.1551; a property insurance bad-faith action seeking extracontractual damages under § 624.155(1)(b) requires an adverse court adjudication establishing that the insurer breached the contract and entry of a final judgment or decree against the insurer.
Recovering unpaid contractual benefits and obtaining additional damages for statutory bad faith are legally distinct matters.
For many Florida homeowners, establishing that the insurer wrongfully withheld covered benefits is the immediate priority.
How Did Florida’s Insurance Reforms Change Bad-Faith Lawsuits?
Florida’s 2022–2023 insurance reforms changed important aspects of property insurance litigation and the remedies available to policyholders.
One significant change was the enactment of Florida Statute § 624.1551, which imposes an additional prerequisite for certain property insurance bad-faith actions seeking damages beyond the insurance contract.
Under that provision, the policyholder must obtain an adverse court adjudication establishing breach of contract and a final judgment or decree against the insurer before pursuing the specified action.
The statute further provides that payment of an appraisal award or acceptance of an offer of judgment under § 768.79 does not satisfy the required adverse adjudication.
Florida’s reforms also eliminated the former general one-way attorney-fee entitlement in residential and commercial property insurance lawsuits governed by the reforms.
Homeowners generally cannot assume that their insurer will reimburse their attorney’s fees simply because they successfully challenge a denied or underpaid property insurance claim.
This change should be distinguished from the separate attorney-fee and cost provisions that may apply to successful statutory bad-faith actions under § 624.155.
The applicable legal rules depend on the claim, the policy, the relevant dates, and the governing law. Some older insurance contracts may be subject to different statutory provisions.
What Must Be Proven to Pursue an Insurance Bad-Faith Claim in Florida?
The required proof depends on the statutory provision involved and the type of insurance dispute.
For a claim alleging failure to attempt a good-faith settlement under § 624.155(1)(b)(1), the central inquiry concerns whether the insurer could and should have attempted settlement under all the circumstances while acting fairly and honestly toward its insured.
The evidence may include the information available to the insurer, the adequacy of its investigation, its communications, applicable coverage obligations, settlement opportunities, and its response to material evidence.
Other statutory violations may require proof of additional elements, such as a qualifying misrepresentation or specified unfair claim-settlement conduct.
Florida law also recognizes that policyholders and their representatives have duties to act in good faith when providing claim information, making demands, establishing deadlines, and attempting settlement. The statute permits certain conduct by a claimant or representative to be considered when determining damages.
For qualifying property insurance claims, the adverse-adjudication requirement of § 624.1551 must also be satisfied before the specified extracontractual bad-faith action can proceed.
A policyholder must establish the applicable legal elements rather than rely solely on the insurer’s incorrect decision on the claim.
What Is a Civil Remedy Notice in a Florida Bad-Faith Claim?
A Civil Remedy Notice, commonly called a CRN, is a formal notice that identifies alleged statutory insurance violations and provides the insurer with an opportunity to correct them.
Under Florida Statute § 624.155, the Department of Financial Services and the authorized insurer must receive the required written notice before any action under that section may proceed.
The notice must identify the statutory provisions allegedly violated and describe the supporting facts with the specificity required by law. Other information, including relevant insurance policy language and identification of individuals involved, may also be required.
Once the insurer receives notice from the department, it generally has 60 days to cure the alleged violation. If the insurer pays the damages or corrects the circumstances giving rise to the violation within that period, the statute provides that no action will lie based on the noticed violation.
Florida law also prohibits filing a CRN within 60 days after any party invokes appraisal in a residential property insurance claim.
Filing a Civil Remedy Notice does not automatically establish bad faith, guarantee additional damages, or eliminate other statutory prerequisites.
An attorney can evaluate whether a CRN is appropriate, what allegations are supported, and how the notice requirements relate to the underlying coverage dispute.
Can You Sue Your Insurance Company for Bad Faith After an Appraisal Award?
An appraisal award does not automatically establish a right to pursue a statutory bad-faith lawsuit against a property insurer.
Appraisal is commonly used to resolve disputes over the amount of a covered property loss, subject to the insurance contract and applicable law.
An award may be substantially higher than the insurer’s original estimate, but the difference does not, by itself, prove bad faith.
Under § 624.1551, payment of an appraisal award does not constitute the adverse court adjudication required for the specified property insurance bad-faith action.
The statute permits the difference between an insurer’s appraiser’s final estimate and the eventual appraisal award to serve as evidence of bad faith. However, that difference does not independently create an actionable claim.
Before proceeding through appraisal or accepting a disputed settlement, homeowners should understand how the process may affect their contractual rights and potential legal remedies.
Can Insurance Bad Faith Arise in Different Types of Florida Insurance Claims?
Although Florida’s statutory framework applies across different insurance contexts, the factual and legal questions vary by coverage type.
Homeowners and Hurricane Damage Claims
Hurricane disputes often involve disagreements over wind damage, flood exclusions, pre-existing conditions, roof deterioration, and repair estimates. The insurer’s investigation and application of policy provisions can become central issues.
An insurer may be challenged when it denies potentially covered hurricane damage based on findings that are inconsistent with credible physical evidence.
Learn more about hurricane insurance claims in Florida.
Water Damage and Plumbing Claims
Water damage disputes may involve sudden plumbing failures, appliance leaks, roof leaks, or deteriorated cast iron pipes.
An insurer may contend that the loss developed gradually or resulted from an excluded maintenance condition. However, coverage for resulting damage may present a separate issue under the policy.
An attorney may need to review plumbing reports, moisture findings, inspection records, and the insurer’s interpretation of relevant exclusions.
Explore our Florida water damage insurance claim services.
Fire and Smoke Damage Claims
Fire insurance disputes may involve structural damage, smoke contamination, damaged contents, code-related repairs, and additional living expenses.
An insurer’s failure to reasonably evaluate these losses may result in disagreements over the extent of covered damage and the amount payable.
Learn more about Florida fire damage insurance claims.
Commercial Property Insurance Claims
Commercial property claims can involve substantial damage to buildings, inventory, and equipment, loss of business income, and additional operating expenses.
Disputes may arise when insurers contest financial documentation, apply exclusions, or substantially underestimate losses resulting from a covered event.
Learn more about Florida commercial insurance claim representation.
Automobile and Liability Insurance Claims
Bad-faith issues can also arise in automobile liability and uninsured motorist insurance claims.
For example, an insurer’s failure to reasonably resolve a liability claim may expose its insured to an excess judgment.
These claims may involve different legal standards and procedural requirements from first-party property insurance disputes, including provisions addressing settlement opportunities and the insurer’s response to competing claims.
How Long Does a Florida Insurance Company Have to Investigate or Pay a Claim?
Florida law establishes specific claim-handling deadlines for residential property insurance claims.
Under Florida Statute § 627.70131, insurers generally must review and acknowledge certain claim communications within seven calendar days, subject to statutory exceptions.
The statute also includes requirements governing when an insurer must begin a reasonably necessary investigation and, when required, conduct a physical inspection.
For claims subject to its payment provisions, an insurer generally must pay or deny an initial, reopened, or supplemental claim, or a portion of it, within 60 days after receiving notice, unless an exception or tolling provision applies.
The statute requires written explanations supporting specified payment and denial decisions.
These deadlines are important because an insurer’s failure to comply may raise questions about its handling of a claim.
However, missing a claim-handling deadline does not automatically establish a separate statutory bad-faith lawsuit. Whether additional remedies are available depends on the applicable law and circumstances.
How Can You Document Evidence of Potential Bad Faith by an Insurance Company?
Evidence concerning the insurer’s investigation and communications may be important when evaluating its conduct.
Keep copies of the insurance policy, declarations page, claim correspondence, denial letters, payment estimates, inspection findings, engineering reports, contractor estimates, and other documentation supporting the loss.
Preserve a timeline showing when the claim was reported, when inspections occurred, when supporting information was submitted, and when coverage decisions were issued.
Written records of conversations with adjusters may also be useful, particularly when the insurer changes its explanation or fails to address important information.
For significant property losses, qualified engineers, contractors, roofing specialists, or other professionals may be necessary to evaluate disputed findings.
The objective is to determine what information the insurer had, when it received that information, and how it responded under the circumstances.
This evidence may support a contractual claim for unpaid benefits and, where appropriate, the separate evaluation of potential statutory violations.
Why Hire an Experienced Florida Insurance Claim Lawyer?
When an insurance company denies or underpays a claim, its decision may be supported by adjuster estimates, engineering reports, expert opinions, and interpretations of policy exclusions. However, the insurer’s findings are not necessarily accurate, complete, or legally justified.
An experienced Florida insurance claim lawyer can independently evaluate the insurer’s investigation, identify discrepancies in its findings, challenge improperly applied exclusions, and determine whether covered benefits have been wrongfully withheld.
At Williams Law Association, P.A., our attorneys examine the insurance contract, investigate disputed damage, scrutinize the evidence supporting the insurer’s position, and work with qualified professionals when necessary. We negotiate disputed claims and pursue litigation when warranted to recover benefits owed under the policy.
Our attorneys also evaluate whether an insurer’s conduct raises potential bad-faith concerns under Florida law, while distinguishing contractual disputes from separate statutory violations.
You do not need to wait for a denial or prove insurance bad faith to hire an attorney. Seeking experienced legal representation early can help protect important evidence, address questionable claim-handling practices, and prevent an insurance company’s disputed conclusions from going unchallenged.
Why Florida Policyholders Choose Williams Law Association, P.A.
Since 1995, Williams Law Association, P.A. has represented Florida policyholders in complex property insurance disputes involving denied coverage, significant underpayments, and contested claim investigations.
Our attorneys understand how insurance companies evaluate property losses, interpret coverage exclusions, calculate settlement offers, and rely on technical findings to support their decisions.
We examine the insurance contract, investigate disputed damage, scrutinize adjuster estimates and engineering opinions, and develop the evidence necessary to challenge unsupported insurer conclusions.
Our firm represents Florida homeowners, businesses, condominium associations, and other policyholders in disputes involving hurricane damage, roof losses, plumbing failures, water intrusion, fire damage, and commercial property insurance claims.
We also evaluate whether an insurer’s conduct raises additional legal issues under Florida’s statutory insurance bad-faith framework.
Williams Law Association, P.A. represents policyholders, not insurance companies.
Our focus is protecting our clients’ interests, challenging improper coverage decisions, and pursuing insurance benefits and other remedies available under Florida law.
Learn more about our experience by reviewing our Florida property insurance case results.
Insurance Company Acting in Bad Faith? Contact Williams Law Association, P.A.
An insurance company’s denial letter, claim evaluation, or settlement offer is not necessarily the final word on what you are entitled to recover.
If your property insurance claim has been wrongfully denied, substantially underpaid, or unreasonably delayed, Williams Law Association, P.A. can help you challenge the insurer’s decision.
Our experienced Florida property insurance attorneys investigate inadequate claim handling, scrutinize disputed coverage decisions, and pursue benefits owed under the policy. We also evaluate whether the insurer’s conduct may support additional legal remedies under Florida’s insurance bad-faith laws.
You do not have to prove bad faith by your insurer to challenge a wrongful denial or seek legal representation. Contact Williams Law Association, P.A. to have our attorneys evaluate your claim, explain your rights, and determine the appropriate legal action.
This article provides general legal information, not advice about an individual claim. The applicable law may depend on the policy, relevant dates, type of insurance, and particular circumstances.