Understanding Bad-Faith Insurance Claims in Florida

Bad-faith insurance claims come in handy when you feel like an insurer has failed to properly do their job and has instead taken advantage of your circumstances. It’s important to understand the intricacies of bad-faith insurance claims so that you can protect yourself and receive the damages you deserve. In this concise guide, we aim to provide you with a comprehensive understanding of the legal landscape surrounding insurance claims in the state. By the time you’re done reading, you’ll understand the essential aspects of bad-faith claims and when to get started filing one. 

The Two Types of Bad-Faith Insurance Claims

When it comes to bad-faith insurance claims in Florida, it’s essential to understand the two distinct types that can arise. These categories shed light on different scenarios where insurance companies may act in bad faith, failing to fulfill their obligations to policyholders. Let’s explore these two types:

First-Party Bad Faith Claims:

First-party bad faith claims occur when an insurance company acts in bad faith towards its own policyholder. In this situation, the policyholder has entered into a contract with the insurer and has a direct relationship with them. Examples of first-party bad faith can include unreasonably denying a valid claim, failing to adequately investigate a claim, or offering an unreasonably low settlement amount. If an insurance company breaches its duty of good faith and fair dealing towards its policyholder, the policyholder may have grounds for a first-party bad faith claim.

Third-Party Bad Faith Claims:

Unlike first-party bad faith claims, third-party bad faith claims involve situations where an insurance company acts in bad faith towards a third party, often an individual who has suffered harm or damage caused by the insured policyholder. In these cases, the injured party makes a claim against the policyholder’s insurance policy. The insurance company has a duty to defend and indemnify the policyholder in good faith. Third-party bad faith occurs when an insurer fails to provide a fair defense, refuses to settle within policy limits despite reasonable opportunities, or engages in dishonest or deceptive practices during the claims process. These actions can expose the policyholder to personal liability beyond the coverage provided by the insurance policy.

Recognizing the specific type of bad faith involved can help determine the appropriate legal recourse and protect the rights of those affected. By being aware of these distinctions, you can navigate the complexities of these claims and seek appropriate remedies when necessary.

Steps to Take When Filing Bad-Faith Insurance Claims

Filing a bad-faith insurance claim in Florida requires a strategic approach to protect your rights and seek fair compensation for the harm caused. If you find yourself facing bad faith from an insurance company, consider taking the following steps:

Review Your Insurance Policy: Thoroughly examine your insurance policy to understand your rights, coverage limits, and the obligations of the insurance company. Familiarize yourself with the terms, conditions, and exclusions that apply to your claim. 

Document Everything: Maintain a detailed record of all communications, including emails, letters, and phone conversations, with the insurance company. Also, keep copies of relevant documents and any other evidence supporting your claim. These records will be invaluable in building your case.

Communicate in Writing: When corresponding with the insurance company, communicate in writing to maintain a clear and documented trail. State your claim, provide the necessary evidence, and request prompt action. Keep copies of all written correspondence for your records.

Document Damages: Document the damages or losses you have suffered due to the incident covered by your insurance policy. Take photographs, gather medical records, repair estimates, and any other relevant evidence that supports the extent of your damages. This evidence will help substantiate your claim and counter any potential attempts to minimize or deny your losses.

Understand Deadlines and Time Limits: Be aware of the deadlines and time limits specified in your insurance policy and the relevant laws in Florida. Failure to meet these deadlines could weaken your claim or result in its dismissal. Promptly notify the insurance company of your claim and adhere to any required procedures or timelines.

Seek Legal Advice: Consulting with an experienced insurance attorney specializing in bad-faith claims can provide invaluable guidance. They can assess the strength of your case, advise you on legal strategies, negotiate with the insurance company on your behalf, and represent you in court if necessary. 

File a Complaint: If attempts to resolve the claim directly with the insurance company prove unsuccessful, you may need to file a formal complaint. Contact the Florida Department of Financial Services or other relevant regulatory authorities to initiate the complaint process. These agencies oversee insurance practices and can investigate allegations of bad faith.

When You Can File a Bad-Faith Claim

Understanding the circumstances in which you can file a bad-faith claim is crucial for determining whether you have grounds for such a claim. Here are some common situations where you may be eligible:

Unreasonable Denial of a Valid Claim: You may have a valid claim for bad faith if your insurance company denies your claim without a reasonable basis or fails to conduct a proper investigation. Insurance companies have a duty to fairly evaluate claims and provide prompt, reasonable explanations for claim denials. Challenging an unjust denial can be grounds for a bad-faith claim.

Delayed Claim Processing: Insurance companies are expected to process claims in a timely manner. While delays can occur due to legitimate reasons, unreasonably protracted processing times without valid justification may be a basis for a bad-faith claim.

Inadequate Investigation: If an insurer fails to properly investigate your claim or selectively gathers evidence to support claim denial, it can be indicative of bad faith. An insurer must reasonably evaluate the facts and evidence related to your claim, and any failure to do so may constitute bad-faith conduct.

Unreasonable Settlement Offers: An insurer may be acting in bad faith if they make an unreasonably low settlement offer, refuse to negotiate in good faith, or undervalue your claim without valid justification. Insurance companies are obligated to make fair and reasonable settlement offers based on the coverage provided by your policy and the damages you have suffered.

Working With Experienced Attorneys

Understanding bad-faith insurance claims can be complicated, stressful, and time-consuming. That’s why our experienced team at Krapf Legal recommends that you contact an experienced claims attorney. With the help of skilled attorneys, you can focus on living your life while they give you the guidance you need to come out on top during the claims process. If you’re interested, call us at Krapf Legal today!