When you purchase insurance, you enter into a contract with your insurer that includes an implied promise of fair dealing. Unfortunately, some insurance companies prioritize profits over policyholders, engaging in practices designed to avoid paying legitimate claims. Florida law recognizes bad faith insurance practices and provides remedies for policyholders who have been treated unfairly. If you believe your insurer is acting in bad faith, a Florida property damage lawyer can help you understand your rights and pursue accountability.
What Constitutes Bad Faith in Florida
Bad faith occurs when an insurance company fails to fulfill its obligations to policyholders honestly and fairly. Under Florida Statute 624.155, policyholders may bring civil actions against insurers who commit certain unfair acts.
Specific conduct that may constitute bad faith includes not attempting in good faith to settle claims when the insurer could and should have done so, failing to act fairly and honestly toward the insured with due regard for their interests, and failing to promptly settle claims when the obligation to settle has become reasonably clear.
Bad faith is more than simple negligence or a mistake in claim handling. Under Florida law, mere negligence alone is insufficient to constitute bad faith. The insurer’s conduct must reflect a knowing disregard for the policyholder’s interests or a pattern of unfair dealing that goes beyond ordinary disputes over claim value or coverage.
Common Examples of Bad Faith Conduct
Recognizing bad faith behavior helps you understand when your insurer may be crossing the line from aggressive claim handling into unlawful conduct.
Unreasonable claim denials occur when insurers reject valid claims without proper investigation or legitimate basis. Denying a claim based on exclusions that do not actually apply, or without examining the evidence supporting coverage, may constitute bad faith.
Failure to conduct adequate investigations is a frequent bad faith indicator. Insurers have a duty to reasonably investigate claims before making coverage decisions. Cursory inspections, ignoring evidence favorable to the policyholder, or failing to follow up on information that supports the claim can all demonstrate bad faith.
Unreasonable delays in processing claims may rise to the level of bad faith when insurers intentionally drag out the claims process to pressure policyholders into accepting less than they deserve. Florida law establishes specific deadlines under Florida Statute 627.70131, including 7 days to acknowledge claims, 60 days to pay or deny, and other requirements.
Lowball settlement offers that bear no reasonable relationship to the actual claim value can indicate bad faith, particularly when the insurer knows the offer is inadequate but hopes the policyholder will accept out of desperation or ignorance.
Misrepresenting policy provisions to policyholders, such as claiming exclusions apply when they do not or misstating coverage limits, constitutes unfair dealing that may support a bad faith claim.
Our Lighthouse Point, FL bad faith insurance lawyers have seen all of these tactics used against Florida property owners with legitimate claims.
Florida’s Bad Faith Legal Framework
Florida law provides a statutory framework for pursuing bad faith claims against insurers, though recent legislative changes have significantly affected how these claims work for property insurance disputes.
Florida Statute 624.155 establishes the civil remedy available to policyholders harmed by insurer bad faith. This statute allows recovery of damages that are a reasonably foreseeable result of the insurer’s bad faith conduct, which may include damages exceeding policy limits.
For property insurance claims specifically, Florida Statute 624.1551 imposes additional requirements. Under this statute, policyholders cannot bring a bad faith action against a property insurer until they have first established through an adverse adjudication by a court that the insurer breached the insurance contract and a final judgment has been rendered against the insurer. This means you must typically win your underlying breach of contract claim before pursuing bad faith damages.
Additionally, acceptance of an offer of judgment or payment of an appraisal award does not constitute an adverse adjudication for purposes of pursuing bad faith. While the difference between an insurer’s estimate and an appraisal award may serve as evidence of bad faith, it alone does not give rise to a bad faith cause of action.
The Civil Remedy Notice Requirement
Before filing a bad faith lawsuit in Florida, policyholders must follow specific procedural requirements designed to give insurers an opportunity to cure their conduct.
Under Florida Statute 624.155, you must file a Civil Remedy Notice (CRN) with the Florida Department of Financial Services before initiating litigation. This notice must specify the statutory violations alleged and give the insurer 60 days to cure the violation.
The CRN cannot be filed within 60 days after appraisal is invoked by any party in a residential property insurance claim. This provision prevents policyholders from pursuing bad faith claims while the appraisal process is still pending.
If the insurer cures the violation within the 60-day period by paying the claim and any additional amounts owed, the bad faith action may be barred. However, if the insurer fails to cure, the policyholder may proceed with litigation.
Filing a proper CRN requires attention to detail and understanding of the statutory requirements. Errors in the notice can delay or jeopardize your bad faith claim.
Documenting Bad Faith Conduct
Building a strong bad faith case requires thorough documentation of the insurer’s conduct throughout the claims process.
Keep a detailed log of all communications with your insurance company. Record dates, times, names of representatives, and summaries of conversations. Note any promises made, deadlines given, or explanations provided for delays or denials.
Save all written correspondence, including emails, letters, and text messages. These documents create a timeline of the insurer’s conduct and can demonstrate patterns of delay, misrepresentation, or unreasonable behavior.
Document the impact of the insurer’s conduct on you and your property. Photographs showing deterioration while waiting for claim payment, records of expenses incurred due to delays, and evidence of emotional distress can all support damages claims.
Obtain copies of your complete claim file from the insurer. Florida law entitles you to this information, and the file often contains internal notes and communications that reveal the insurer’s decision-making process.
Damages Available in Bad Faith Cases
When bad faith is proven, Florida law provides for recovery of damages beyond what the policy itself would pay.
Compensatory damages include the actual losses you suffered as a result of the insurer’s bad faith conduct. This can include the unpaid policy benefits, costs incurred due to delays such as temporary housing or emergency repairs, damage that worsened while waiting for payment, and other foreseeable economic losses.
Consequential damages resulting from the bad faith conduct may also be recoverable. These might include business losses, credit damage, or other harms that flow from the insurer’s failure to pay promptly and fairly.
In some cases, damages may exceed policy limits. This is one of the key distinctions between a simple breach of contract claim and a bad faith claim, as bad faith damages are not capped at the policy’s coverage amount.
How a Property Damage Lawyer Can Help
Bad faith claims involve complex legal requirements and face well-funded opposition from insurance company defense teams. Pursuing these claims without experienced legal representation significantly reduces your chances of success.
An attorney can evaluate whether your insurer’s conduct rises to the level of actionable bad faith under current Florida law. Not every frustrating claims experience constitutes bad faith, and an honest assessment helps you understand your options.
Legal representation ensures proper compliance with procedural requirements, including the Civil Remedy Notice process. Errors in these procedures can bar your claim entirely.
A property damage lawyer can gather evidence, retain expert witnesses when necessary, and build a compelling case demonstrating the insurer’s bad faith. This includes obtaining and analyzing the insurer’s claim file to uncover evidence of improper conduct.
The People’s Law Team, PA Property Damage Lawyers has over 25 years of experience holding insurers accountable for bad faith practices throughout Florida. Attorney Maria O’Donnell’s background handling Special Investigation Unit cases for major carriers like State Farm, Citizens, and Allstate provides invaluable insight into how insurers operate internally. We use that knowledge to identify bad faith conduct and pursue maximum recovery for our clients. Contact us for a free consultation to discuss your situation.