Bad Faith Claims: What You Need to Know
When purchasing insurance in Florida, the expectation is a relationship based on trust and good faith. Unfortunately, situations may arise where insurers fail to meet these expectations, resulting in a bad faith insurance claim. These claims can arise from actions such as unwarranted denials, delayed payments, or insufficient settlements.
Under Florida Law, your rights are protected by laws allowing you to take legal action against insurers who breach their obligations. Navigating insurance complexities and identifying legitimate bad faith claims can be daunting. Understanding your rights, enshrined in state statutes, is crucial when dealing with insurers not honoring their contracts. This article explores the nuances of bad faith claims in Florida, providing insights into your rights and recourse options.
Understanding Bad Faith Claims in Florida
In Florida, a bad faith claim arises when an insurance company fails to handle your insurance claim with the care and honesty required by law. This can manifest as unreasonable delay, denial, or underpayment of a claim.
Definition and Overview of Bad Faith
Bad faith in insurance terms means an insurer’s failure to fulfill its obligations to you, the policyholder, with a reasonable degree of care and honesty. This encompasses a violation of the duty of good faith, where the insurance company must not solely focus on its interests but balance your interests as well. If an insurer unreasonably denies, delays, or fails to properly investigate or settle claims, it may be acting in bad faith.
Florida Statutes and Bad Faith Claims
According to Florida Statute 624.155, policyholders have the right to file a statutory bad faith claim against insurers. This legal provision offers you, the claimant, a way to hold insurance companies accountable if they act in bad faith. Harvey v. Geico, a prominent case, further established important standards in how these statutes are to be interpreted in Florida insurance law.
Types of Bad Faith Claims
Bad faith claims in Florida can be broadly categorized into two types: first-party and third-party claims. A first-party claim involves the policyholder directly suing their insurer for acting in bad faith regarding their own claim. In contrast, a third-party claim occurs when an insurer mishandles a claim made against a policyholder by someone else, potentially exposing the policyholder to personal liability.
Role of Insurance Companies
Insurance companies have a duty to their policyholders to abide by the terms of the insurance agreement and to act in good faith. This includes obligations such as acknowledging and processing claims promptly, properly investigating the claims, and engaging in fair settlement practices. Insurance adjusters should diligently ensure that they fulfill these duties to avoid claims of bad faith.
Legal Grounds for Bad Faith Claims
To establish a bad faith claim in Florida, you must demonstrate that the insurer did not just make an error, but acted without proper cause or motives that were not aligned with the expectations of the policy. This might involve presenting evidence that proves unjustified refusals to pay a claim or failure to properly defend, indemnify, or settle a claim.
The Claims Process
Proper handling of the claims process by insurance companies in Florida involves acknowledging all settlement demands, communicating with the claimants, and providing timely decisions on claims. Disputes often arise when insurers fail to settle claims where liability is reasonably clear. Policyholders may then require the services of attorneys to navigate the complexities of bad faith litigation.
Pursuing a Bad Faith Claim in Florida
When you’re dealing with an insurance claim in Florida, understanding your rights and the intricacies of the legal process can empower you to effectively pursue a bad faith claim. Below, you’ll find specific insight into the necessary steps and considerations tailored to Florida law.
The Right to File a Bad Faith Claim
Your right to file a bad faith claim arises when an insurance company, whether yours or a third party’s, does not handle your claim with the proper level of care and diligence as dictated by Florida law. In Florida, if an insurer is neglectful or evasive regarding the obligations of an insurance contract, you or a third-party claimant might have grounds for action.
Potential Damages and Compensation
When proving bad faith, damages such as unpaid medical expenses and other incurred costs resulting from the claim may be sought. Additionally, Florida law allows for the recovery of punitive damages if the insurer’s actions were particularly egregious. An excess judgment, which exceeds policy limits, may also be considered if you’ve suffered due to the insurance company’s improper handling.
Litigation and the Court System
Should your case proceed to litigation, it is vital to understand that the court will scrutinize the insurer’s actions in the context of the “totality of the circumstances”. Key legal precedents such as Harvey v. GEICO demonstrate the standards insurers must meet, and new statutes like House Bill 837 (HB 837) could impact the process.
Settlement Negotiations and Strategies
Effective settlement strategies often involve carefully crafted settlement demands and offers. To encourage a fair settlement, presenting a demand that accurately reflects your damages and accounts for the insurer’s potential negligence is crucial. Recognize that insurers might be more inclined to settle once a strong case for bad faith is established.
Florida’s Unique Considerations
Unique to Florida, the Florida Department of Financial Services offers a mechanism for initially handling bad faith claims which can impact how cases are negotiated and litigated. Be mindful of Florida-specific statutes and understand how they can affect the approach to your bad faith claim.
Seeking Legal Advice
Navigating a bad faith claim often necessitates assistance from an experienced attorney with such as Krapf Legal with a strong foundation in Florida’s legal statutes and case law. Your attorney will guide you through the process, from evaluating the merits of your claim during a free consultation to possibly representing you in court. Additionally, under certain circumstances, Florida law may allow recovery of attorney’s fees, enhancing your access to qualified legal aid.
