Guide to Bad Faith Insurance Claims in Florida

Fri May 5th, 2023 on     Bad Faith Insurance,    

If your insurance company has denied your claim or resolved it unsatisfactorily, you may be able to bring a bad faith claim against them in court.  Of course, not every denial constitutes bad faith. As Miami insurance claim lawyers, we are experienced in determining whether an insurer has handled a claim appropriately and in recognizing bad faith insurance practices.  For a policyholder, the first step is to educate yourself as to what your insurance company is obligated to do.  The law requires insurers to act in good faith and to engage in fair deals.  Specifically, they are obligated to:

Recognize Your Claim

Florida Statute 627.70131(1)(a) states that “the insurer shall, within 14 calendar days, review and acknowledge receipt of such communication unless payment is made within that period of time or unless the failure to acknowledge os caused by factors beyond the control of the insurer.”

Investigate In a Prompt Manner

Florida Statute 627.40131(3)(a) states that “(u)nless otherwise provided by the policy of insurance or by law, within 14 days after an insurer receives proof-of-loss statements, the insurer shall begin such investigation as is reasonably necessary…”

Provide You With An Estimate

Florida Statute 627.70131(1)(d) states that (w)ithin 7 days after the insurer’s assignment of an adjuster to the claim, the insurer must notify the policyholder that he or she may request a copy of any detailed estimate of the amount of the loss generated by an insurer’s adjuster. After receiving such a request from the policyholder, the insurer must send any such detailed estimate to the policyholder within the later of 7 days after the insurer received the request or 7 days after the detailed estimate of the amount of the loss is completed.

It is also important to note that the insurer can not slow down the progression of your claim with unnecessary forms they must offer actual reasons for denial of your claim or delays in the process.

There Are Two Types of Bad Faith Claims

A “first-party” bad faith claim arises when an insurance company unreasonably refuses to pay a claim or to properly investigate a claim. These claims usually stem from certain insurance policies, including:

  • Health insurance policies
  • Fire insurance policies
  • Flood or tornado insurance policies 

A “third-party” bad faith claim is when an insurance company unreasonably fails to defend, indemnify or settle a claim within policy limits or to investigate a claim for a different-party, such as when the insured (the first party, you) buys insurance from the insurance company to protect against claims from another (the third party). Third-party claims often result in the following types of insurance policies:

  • Professional Liability
  • Commercial Liability
  • Homeowner’s Liability

The Miami insurance claim lawyers at Ver Ploeg & Marino represent corporate and individual policyholders in both types of bad faith claims.

Florida Law on Bad Faith Claims

The good news for bad faith claimants in Florida is that the law is quite clear.  The statute provides that “any person may bring a civil action against an insurer when such person is damaged” by certain acts by the insurer, including:

  • Not attempting in good faith to settle claims when, under all the circumstances, it could and should have done so, had it acted fairly and honestly towards its insured and with due regard for her or his interests;
  • Making claims payments to insureds or beneficiaries not accompanied by a statement setting forth the coverage under which payments are being made; or
  • Failing to promptly settle claims, when the obligation to settle a claim is reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage.

Florida courts have interpreted the good faith requirement in Florida as a “duty to their insureds to refrain from acting solely on the basis of their own interest in settlement.”

Bad Faith Under Florida’s Unfair Insurance Trade Practices Act

Bad faith claims may also be based on violations of Florida’s Unfair Insurance Trade Practices Act which defines unfair claim settlement practices to include different actions or inactions made by the insurer, including:

  • Attempting to settle claims on the basis of an application, when serving as a binder or intended to become a part of the policy, or any other material document which was altered without notice to, or knowledge or consent of, the insured;
  • A material misrepresentation made to an insured or any other person having an interest in the proceeds payable under such contract or policy for the purpose and with the intent of effecting settlement of such claims, loss, or damage under such contract or policy on less favorable terms than those provided in, and contemplated by, such contract or policy; or
  • Committing or performing with such frequency as to indicate a general business practice any of the following:
  1. Failing to adopt and implement standards for the proper investigation of claims;
  2. Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue;
  3. Failing to acknowledge and act promptly upon communications with respect to claims;
  4. Denying claims without conducting reasonable investigations based on available information;
  5. Failing to affirm or deny full or partial coverage of claims, and, as to partial coverage, the dollar amount or extent of coverage, or failing to provide a written statement that the claim is being investigated upon the written request of the insured within 30 days after proof-of-loss statements have been completed;
  6. Failing to promptly provide a reasonable explanation in writing to the insured of the basis in the insurance policy, in relation to the facts or applicable law, for denial of a claim or for the offer of a compromise settlement;
  7. Failing to promptly notify the insured of any additional information necessary for the processing of a claim; or
  8. Failing to clearly explain the nature of the requested information and the reasons why such information is necessary.

There are other violations specified in Florida’s Unfair Insurance Trade Practices Act that your Miami insurance claims lawyers may use to bolster your case. 

Insurance Companies Must Be Given An Opportunity to Cure

Before you can bring a bad faith claim, the insurance company must be given 60 days to cure the alleged violation.  To begin the process, the policyholder is required to file a notice with both the insurance company and the Department of Financial Services.  It they settle the claim to your satisfaction within 60 days, then you no longer have a bad faith claim.  If not, the next step is to file a complaint in court.

Let Miami Insurance Claims Lawyers Assist You With Your Bad Faith Claim

If you think your insurance company has acted in bad faith, we welcome you to contact the Miami insurance claim lawyers at Ver Ploeg & Marino by calling (305) 577-3996 or via our contact page for a consultation.  Our firm focuses its practice solely on representing corporate and individual policyholders in large and complex insurance recovery matters.

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