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 language that is most conducive to making a profit. If the insurance company breaches a contract with a client, however, the client may be able to bring a lawsuit against the insurance 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 language, terms or provisions of the contract by either party involved. An insurance breach of contract specifically refers to an insurance provider failing to fulfill the agreed-upon terms or conditions of a contract (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 a common occurrence. Insurance companies are for-profit businesses that will try many tactics to protect their profits, including going as far as to breach 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 properly investigate a claim
- 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 dealing from 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 promises given.
Can I Sue My Insurance Company for Breach of Contract?
Breaching a contract goes against civil law. A breach of contract by an insurance company 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, yes, it is possible to file a civil claim for an insurance breach of contract in Florida.
During this type of case, a judge or court will interpret an insurance contract and analyze the insurance company’s actions to determine if a violation took place. If the courts rule in favor of the policyholder, he or she could recover fair compensation for the original losses suffered, as well as 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 five years, in most cases. In a case involving a specific performance breach of contract, however, the deadline is only one year. It is important to contact a Florida insurance claims lawyer as soon as possible if you believe you have a breach of contract case. A lawyer can help you file the required paperwork on time to pursue fair financial compensation.
Has Your Home Insurance Company Denied Or Undervalued Your Property Damage Claim In Florida?
If your insurance company is dragging their feet regarding your property damage claim you should speak with an experienced insurance claim lawyer as soon as possible. Please contact us online or call our Tampa, Florida law office directly at 800.451.6786 to schedule your free consultation. We help Florida residents just like you fight the big insurance companies who fail to abide by their own policies. Remember, we work on a contingent basis, meaning you don't pay us anything until we win your case.