Suing Insurance for Bad Faith

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All insurance companies have a legal duty to treat their policyholders and clients in good faith. Good faith refers to honest and earnest intentions when dealing with client claims. The good faith requirement prevents insurance companies from taking advantage of clients when they suffer personal injuries or property damages. Unfortunately, not every insurance company upholds the good faith requirement. Bad faith insurance practices could give a client the right to file a lawsuit against the insurance provider in Florida.

What Is Bad Faith Insurance?

Bad faith insurance can refer to any action or lack of action by an insurance company that breaches its duty to deal with a claim in good faith. If a reasonable insurance company would not have done the same thing under the same circumstances, the insurer could be guilty of insurance bad faith. Many different actions or omissions could constitute insurance bad faith when handling a personal injury claim or another type of insurance lawsuit in Florida.

  • Waiting too long to respond to a claim
  • Failing to properly investigate a case
  • Denying a claim without giving an explanation
  • Denying a claim using an invalid reason
  • Interpreting the insurance policy unreasonably
  • Refusing to offer a reasonable settlement
  • Delaying a claimant’s payout without reason
  • Making threats against the claimant

An insurance company may engage in bad faith practices to try to escape liability, avoid payout or save money on a claim. Bad faith practices could harm claimants by making them wait an excessive amount for the money they need to pay off their bills and move forward. Thousands of people have accepted claim denials without recognizing insurance bad faith – leading to missed opportunities to enjoy the financial relief they needed after serious accidents. If a claimant suspects insurance bad faith, he or she may need to resolve the issue with a lawsuit.

Florida Bad Faith Laws

Florida Statute 624.155 contains the state’s main law regarding insurance bad faith. It defines bad faith as a failure to attempt to settle a claim in good faith when the insurance company should have done so according to the circumstances. An insurance company in Florida may be guilty of bad faith if it failed to act fairly, honestly, reasonably or with due regard for the interests of the insured party. Failure to promptly settle a claim without good reason is also a bad faith practice in the eyes of Florida law.

A victim of insurance bad faith in Florida may only bring a claim if the bad faith occurred during a first-party insurance claim, not a third-party claim. The victim must have sought damages from his or her own insurance company, not another person’s insurance company. If someone does have grounds to file a claim for insurance bad faith, the first step is issuing a Civil Remedy Notice. In Florida, the Department of Financial Services takes these notices. This will commence a 60-day period, in which the insurance company must receive and respond to a written notice of the alleged violation.

The insurance company will have 60 days from receiving a valid Civil Remedy Notice to resolve the issue. If the insurance company complies with the claimant’s requests, this will end the case. If the insurance company does not correct the violation, the insured party will have the right to proceed with a lawsuit.

Most bad faith lawsuits in Florida fall under the theory of contractual liability. In these cases, a lawyer or another party must confirm the insured has grounds for a claim due to a breach of contract. Then, the claimant may proceed with an insurance bad faith lawsuit against the provider. A successful bad faith claim could result in payment not only for the claimant’s original damages but also additional awards for the inconvenience the insurance company caused.