Can you sue if an insurance company fails to compensate the policyholder as outlined in the insurance policy agreement?

Insurance companies are expected to settle claims in good faith. A failure to do so is a violation of state law. Florida’s law specifically states that insurance companies must act “fairly and honestly toward its insured and with due regard for her or his interests.” So what happens when this expectation is not met? Those who feel their insurance company failed to meet this obligation may consider moving forward with a bad faith claim against the insurance company.

How Do Insurance Policies Work?

In order to understand how a bad faith claim works, it helps to understand the legal basics of insurance policies.

Insurance policies are basically contracts. The foundation of contract law is the agreement that one party will offer a service to another party in exchange for some form of consideration. In this type of agreement, the service offered takes the form of a promise to compensate another in the event of a loss under certain specified conditions in exchange for the other party paying a premium. The resulting agreement is the insurance policy.

When it comes to bad faith claims, two specific types of insurance policies are most often the culprits: property insurance and liability insurance.

When Does a Bad Faith Claim Arise?

An insurance company can be guilty of bad faith in a number of different circumstances. The most obvious is when the company fails to provide payment as outlined in the agreement, often referred to as a wrongful denial of benefits. Other examples include not compensating the policyholder adequately or failing to reply to a filed claim in a prompt manner.

In order to build this case, the insured must first establish that damages are present which qualify for coverage within the terms of the contract. Next, the insured must show that the insurance company’s handling of the claim did not meet the expectations outlined in the contract, or insurance policy.

Is It Difficult to Put Together a Bad Faith Claim?

Bad faith claims are complicated. These legal challenges can be brought under common law or statutory law and can involve third-party claims. These legal matters are not easy ones to pursue. As such, anyone that believes he or she is the victim of a bad faith denial on the part of an insurance company should seek legal counsel. An experienced insurance claims attorney can review the details of your denied claim. Your insurance claims lawyer can help build a bad faith claim against the insurance company and better ensure you receive the benefits you are entitled.

Has Your Home Insurance Company Denied or Undervalued Your Property Damage Claim in Florida?

If your insurance company is dragging its 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 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. 

K.C. Williams III
Managing Partner who has spent his entire career representing Florida insurance and personal injury claims.