In Florida, bad faith law requires that insurance companies act in the best interests of their policyholders. This often means that an insurance company has the duty to look for coverage when a policyholder files a legitimate claim, rather than looking for ways to deny coverage. Under bad faith law, insurance companies must fulfill several other obligations in accordance with common law principles of good faith and fair dealing. Generally, an insurance company acts in bad faith in failing to settle a claim 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 his interests.
Under bad faith law, insurance companies are required to adjust a claim within a reasonable period of time. Insurers must also fully cooperate with claimants. This includes providing prompt responses to policyholder’s inquiries. Furthermore, Florida’s bad faith law requires insurers to, among other things, disclose to policyholders the reasons why they are denying requested benefits and cite specific policy provisions in support of their position.
Violations giving rise to bad faith lawsuits include the following:
- 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 to its insured and with due regard for the insured’s interests;
- Making claims payments to insureds not accompanied by a statement setting forth the coverage under which payments are being made;
- Failing to promptly settle the claim, when the obligation to settle the claim has become reasonably clear;
- Despite absence of a settlement demand, a liability insurer fails to initiate settlement negotiations when liability is clear enough, and damages serious enough, that an excess judgment is probable. Powell v. Prudential Property & Casualty Ins. Co., 584 So. 2d 12 (Fla. 3d DCA 1991); MacHalette v. Southern Owners Ins. Co. 2011 WL 3703368;
- Faced with multiple competing claims, failing to fully investigate all of the claims, failing to keep the insured informed about the claims process, failing to seek to settle as many claims as possible within the policy limits, and failing to minimize the magnitude of possible excess judgments without indiscriminately settling selected claims. Farinas v. Florida Farm Bureau Gen. Ins. Co., 850 So. 2d 555,560-61 (Fla. 4th DCA 2003).
If your insurance company is giving you the around and unreasonably refusing to properly adjust your claim, contact JP Salas Law at 954-315- 1155.