Insurance companies have a wealth of experience preparing contracts and litigating policy terms. They also have experience maximizing their profits through business practices that minimize claim payouts. Insurers carefully word their policies using the most conducive language to making a profit. If the insurance company breaches a contract with a client, however, the client may be able to file a lawsuit against the insurance company for this civil tort.

What Is a Breach of Contract?

A breach of contract refers to a failure to fulfill the obligations or responsibilities required of a party by legal contract or agreement. It can refer to any action or omission that violates the contract’s language, terms, or provisions by either party involved. An insurance breach of contract refers explicitly to an insurance provider failing to fulfill a contract’s agreed-upon terms or conditions (e.g., an insurance policy) with a client.

Common Examples of Insurance Breach of Contract

Unfortunately, an insurance company failing to uphold its promises to clients is common. Insurance companies are for-profit businesses that will try many tactics to protect their profits, including breaking a contract. Breaching a contract is a form of insurance bad faith or an insurance company failing to handle a claim in a good faith attempt to resolve the client’s legal issue. Common examples of breaches of contract by insurance companies are:

Falsely advertising a policy or using deceptive selling practices
Misinterpreting the language of a policy
Failing to meet the reasonable expectations of the policyholder
Using unfair, ambiguous or illegal language in its contract (unconscionability)
Failing to respond to a claim within a reasonable amount of time
Failing to investigate a claim properly
Refusing to pay for something that is listed as a covered loss
Refuting liability for an accident or event
Offering much less than the policyholder deserves for a loss
Not offering as much as the limits of the policy allow
Rejecting a claim without a valid reason

In essence, any unfair or bad-faith dealings by an insurance company against a policyholder could go against the policy and constitute a breach of contract. In this scenario, the wronged policyholder may be able to bring a lawsuit against the insurance provider for failing to meet the covenant of good faith and fulfill the promises made.

Can I Sue My Insurance Company for Breach of Contract?

Breaching a contract goes against civil law. An insurance company’s breach of contract is an example of a tort or wrongdoing. When a tort results in harm, injury, or financial loss to a victim, the victim (plaintiff) has the right to bring a personal injury lawsuit against the at-fault party (defendant) in pursuit of financial compensation. In other words, it is possible to file a civil claim for an insurance breach of contract in Florida.

In this type of case, a judge or court interprets an insurance contract and analyzes the insurance company’s actions to determine if a violation occurred. If the courts rule in favor of the policyholder, he or she could recover fair compensation for the original losses suffered and general damages for insurance bad faith. Punitive damages may also be available if the insurer acted with egregious or outrageous misconduct in breaching a contract.

There are time limits on filing a breach-of-contract claim against an insurance company. In Florida, this time limit (also known as a statute of limitations) is typically five years. However, in a case involving a specific performance breach of contract, the deadline is only one year. If you believe you have a breach-of-contract case, it is important to contact a Florida insurance claims lawyer as soon as possible. A lawyer can help you file the required paperwork on time to pursue fair financial compensation.