If you file an insurance claim in Florida, you expect the company to handle it fairly. In circumstances where that isn’t the case and they fail to do so, such as by unreasonably denying a valid claim, Florida law gives you the right to take legal action through what’s known as a bad faith claim.
Bad faith claims can result in damages that go well beyond the original policy limits, which makes them one of the most powerful tools available to policyholders and accident victims. Read on for more information about how these claims work in Florida and what you need to know before pursuing one.
What Is Bad Faith Under Florida Law?
At its core, bad faith means the insurance company did not act fairly and honestly in handling your claim. Florida Statutes § 624.155 creates a cause of action that allows individuals to sue an insurer for failing to settle claims when it could and should have done so. The statute specifically targets conduct that goes beyond a simple coverage disagreement or a good-faith difference of opinion about the value of a claim.
HB 837 added language clarifying that mere negligence on the insurer’s part is not enough to support a bad faith claim. The conduct has to rise above a careless mistake or a reasonable dispute. The insurer’s handling of the claim is evaluated under a “totality of the circumstances” standard, meaning the court looks at everything the company did and didn’t do throughout the process.
First-Party vs. Third-Party Bad Faith
There are two types of bad faith claims in Florida that work differently depending on whose insurer is at issue.
First-Party Bad Faith
A first-party bad faith claim is one you bring against your own insurance company. This comes up when your insurer unreasonably denies, delays, or underpays a claim you filed under your own policy. Common examples include a homeowner’s insurer refusing to pay for storm damage or an auto insurer dragging out a UM/UIM claim for months without justification.
In Florida, first-party bad faith exists only by statute. There is no common law first-party bad faith cause of action.
Before you can file a first-party bad faith lawsuit, three things need to happen:
- The insurer’s liability for coverage must be determined.
- The extent of your damages must be established.
- You must file a Civil Remedy Notice (CRN) with the Florida Department of Financial Services, which gives the insurer 60 days to cure the violation before a lawsuit can proceed.
Additional requirements apply to property insurance claims. An insured or named beneficiary must obtain an adverse court ruling establishing a breach of the insurance contract and a final judgment or decree. An appraisal award alone is not enough.
If the insurer pays the claim or resolves the issue within that 60-day window, your bad faith claim cannot proceed. If it doesn’t, you can move forward with your lawsuit.
Third-Party Bad Faith
A third-party bad faith claim involves the at-fault party’s liability insurer. This type of claim typically arises when the insurer has an opportunity to settle a personal injury case within the policy limits but unreasonably fails to do so, exposing its own insured to an excess judgment.
Unlike first-party claims, third-party bad faith can be pursued under both the statute and Florida common law. These cases often come up in car accident claims where the at-fault driver’s insurer refuses to offer a reasonable settlement, the case goes to trial, and the verdict exceeds the policy limits. The insured can then bring a bad faith claim against their own insurer for failing to protect them from that excess liability.
What Damages Can I Recover in a Florida Bad Faith Case?
The potential damages in a bad faith case go far beyond what the original insurance policy would have covered.
If you prevail, you may be entitled to:
- The full amount of an excess judgment, even if it exceeds the policy limits
- Consequential damages resulting from the insurer’s bad faith conduct
- Attorney’s fees in certain circumstances
- Punitive damages in limited cases involving intentional misconduct or gross negligence
These expanded damages are what make bad faith claims so significant. They hold insurers accountable for conduct that goes beyond a simple coverage denial and into territory that causes real, avoidable harm to the policyholder.
Contact a Florida Bad Faith Insurance Attorney at Workman Car Accident & Personal Injury Lawyers to Schedule a Free Consultation
An insurance company that refuses to play fair shouldn’t get away with it. If your insurer has treated you improperly when it had the chance to make things right, you may have a bad faith claim under Florida law. Reach out to Workman Car Accident & Personal Injury Lawyers to arrange a free consultation with a Florida bad faith insurance lawyer.
We proudly serve Fort Lauderdale, Clermont, and the surrounding areas throughout Florida.
Workman Car Accident & Personal Injury Lawyers Fort Lauderdale
2312 S Andrews Ave, Fort Lauderdale, FL 33316
(954) 361-3997
Workman Car Accident & Personal Injury Lawyers Clermont
1655 E Hwy 50 ste 316, Clermont, FL 34711
(352) 773-3866