What Is An Insurance Breach Of Contract In Florida?
Insurance breach of contract occurs when your insurance company fails to fulfill its obligations under your policy after you’ve paid premiums and met all policy conditions. After nearly 30 years representing Florida policyholders and recovering over $300 million in insurance disputes, we’ve seen insurance companies breach contracts through wrongful claim denials, unreasonable payment delays, underpayment of legitimate claims, and violations of policy terms that harm policyholders financially.
What Elements Must I Prove for an Insurance Breach of Contract Claim?
Florida law requires proving four essential elements to establish a breach of contract claim against an insurer. First, you must demonstrate that a valid insurance contract existed between you and the insurance company, typically proven through your policy documents, premium payment records, and the insurer’s acceptance of your coverage application. Second, you must show that you satisfied all policy conditions, including timely premium payments, prompt loss notification under Florida Statute § 627.7142, cooperation with investigations, and compliance with policy duties like protecting property from further damage after initial losses.
Third, you must prove the insurance company breached material terms of the contract by failing to pay covered claims, denying coverage without justification, unreasonably delaying claim processing beyond statutory timeframes, underpaying legitimate losses, or violating specific policy provisions regarding claim handling, investigation, or payment. Fourth, you must demonstrate that the breach caused you actual damages, including unpaid insurance benefits, costs to repair or replace damaged property you had to pay yourself, additional living expenses during delays, consequential damages from the breach, or interest on wrongfully withheld benefits under Florida Statute § 627.428.
Unlike bad faith claims under Florida Statute § 624.155 that require proving the insurer acted unreasonably without proper cause, breach of contract claims require showing the insurance company failed to perform its contractual obligations regardless of whether their conduct was reasonable or in good faith.
What Are the Most Common Types of Insurance Contract Breaches?
Wrongful claim denials represent the most frequent breach, occurring when insurance companies deny legitimate claims by misinterpreting policy language, applying exclusions that don’t actually apply to your situation, claiming damage resulted from non-covered causes when covered perils actually caused losses, or alleging policy violations you didn’t commit.
Underpayment of valid claims constitutes a breach when insurers acknowledge coverage exists but pay substantially less than the actual damages warrant. They achieve underpayment through lowball damage estimates that ignore repair costs, failure to include all covered damage in their assessments, refusal to pay for code upgrades required by the Florida building code when repairing damaged structures, or disputing reasonable and necessary repair costs without a legitimate basis.
Unreasonable payment delays breach the policy terms and Florida statutory requirements under § 627.70131, which mandate specific timeframes for claim acknowledgment, completion of investigation, and payment of undisputed amounts. Insurance companies breach contracts by failing to acknowledge claims within fourteen days as required by § 627.7142, conducting unnecessarily prolonged investigations without justification, demanding excessive documentation beyond policy requirements, or withholding payment on undisputed claim portions while investigating disputed amounts.
Failure to conduct proper investigations before denying claims breaches the insurance company’s implied duty of good faith and fair dealing, violating both contract terms and Florida Statute § 626.9541. Insurers breach contracts when they deny claims without inspecting damage, refuse to send qualified adjusters to assess losses properly, ignore expert reports supporting your claim, or fail to adequately investigate the cause and extent of damage before issuing denials.
What Should I Do When I Suspect My Insurer Breached Our Contract?
Document everything in writing, including all communications with your insurance company, claim denials, payment delays, requests for additional information, and the dates you provided requested documentation. This written record establishes the timeline of the insurer’s breach and your compliance with policy conditions.
Preserve all evidence of your damages, including repair estimates from licensed contractors, invoices for work you paid for yourself when the insurer wouldn’t pay timely, photographs documenting damage extent and severity, and records of additional expenses caused by claim delays like extended temporary housing costs or storage fees for displaced belongings.
Review your insurance policy carefully to identify the specific provisions you believe the insurance company violated, noting policy language about covered perils, claim handling procedures, payment timeframes, and any conditions precedent you satisfied. Understanding exact policy terms helps your attorney prove the insurer breached specific contractual obligations.
Do not accept final claim payments or sign releases without consulting an attorney, as accepting “final payment” or signing release forms may waive your rights to pursue additional compensation even if the insurance company underpaid your claim substantially. Florida law sometimes allows rescission of releases obtained through fraud or misrepresentation, but preventing these situations proves easier than fixing them after signing away your rights.
Can Insurance Companies Breach Contracts Through Payment Delays Alone?
Yes, unreasonable payment delays constitute a breach of contract, even if the insurance company ultimately acknowledges coverage and pays the claims. Florida Statute § 627.70131 requires property insurers to pay claims within ninety days after reaching an agreement or receiving proper proof of loss, and any delay beyond the statutory deadlines constitutes a breach of both the policy terms and Florida law.
Payment delays cause significant harm to policyholders who cannot afford repairs without insurance proceeds, forcing them into additional debt, allowing property damage to worsen, or leaving them displaced from their homes or businesses for extended periods. We’ve recovered substantial damages for clients whose insurance companies unreasonably delayed payment of legitimate claims, including interest on withheld benefits, consequential damages arising from the delays, and attorneys’ fees for forcing them to litigate to obtain payments they should have received months or years earlier.
Insurance companies sometimes delay payments, hoping policyholders will accept lowball settlements rather than wait for proper compensation, or to pressure financially stressed homeowners into giving up valid claims. These delay tactics breach contractual obligations to handle claims promptly and in good faith, creating liability for damages beyond unpaid policy benefits.
When Should I Hire an Attorney for Insurance Contract Breach?
Contact a Florida insurance attorney immediately when your insurance company denies your claim, offers settlements substantially below actual damages, delays claim processing beyond reasonable timeframes, or violates policy procedures for claim handling. Early legal involvement prevents you from making statements or accepting inadequate settlements that waive your rights to full compensation.
Hire an attorney when the insurance company requests that you sign forms, releases, or statements without clearly explaining how these documents affect your claim rights. Insurance companies sometimes use confusing paperwork to obtain waivers of rights or admissions that strengthen their defenses to denial.
Seek legal representation when claim values exceed $10,000, and the insurance company’s explanations for denials or underpayments don’t align with your policy language or seem pretextual. Williams Law Association, P.A. offers free consultations to evaluate whether your insurer breached your contract and what legal options you have to recover full compensation. Call (813) 288-4999 or toll-free (800) 451-6786 for your free consultation.
We serve Tampa, St. Petersburg, Clearwater, Brandon, Riverview, Wesley Chapel, and all surrounding Hillsborough, Pinellas, and Pasco County communities. Since 1995, we’ve recovered over $300 million for Florida property owners.