Insurance companies have a fiduciary duty to act in good faith when adjusting claims. If an insurance carrier improperly denies a claim or offers less than the claim is actually worth, then the insurer may have acted in bad faith.
The Florida Legislature enacted specific rules to ensure that insurance carriers act in good faith, and to punish those that do not. Florida Statutes, Section 624.155(1)(b)1., sets forth violations giving rise to bad faith causes of action, including the following:
- Not attempting in good faith to settle claims when, under all the circumstances, the carrier could and should have done so, had it acted fairly and honestly to its insured and with due regard for the insured’s interests
- Making claims payments to insureds not accompanied by a statement setting forth the coverage under which payments are being made
- Failing to promptly settle the claim, when the obligation to settle the claim has become reasonably clear
When reviewing a bad faith claim, Florida courts will look at the “totality of the circumstances” to decide if the carrier is liable for damages. Factors may include:
- Efforts taken by the insurance carrier to resolve coverage issues promptly, or to limit potential prejudice to its insured
- Diligence and thoroughness of investigating the specific facts surrounding the claim
- Whether the insured attempted to settle the claim where a reasonably prudent person would have done so given the facts
If you believe that an insurance carrier has acted in bad faith, there are specific steps you must take to be able to hold them liable for those actions. To begin with, to be entitled to statutory damages you must first provide 60 days written notice to the insurance carrier to allow them to cure the offending conduct. If the carrier does so, then there can be no action for bad faith damages.
See below for more information:
Bad Faith in Florida – a technical overview of the common law and statutory bad faith claims available in Florida.
Florida Insurance Bad Faith Law: Protecting Businesses and you – a comprehensive discussion of bad faith law.