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Tampa Bay Bad Faith Insurance Claims Law Firm

When an insurance company fails to honor the obligations in your insurance contract or fails to perform some other responsibility it has to you according to the insurance you purchased, you may have a case against the insurance company for “bad faith.”

At the law firm of Lucas, Macyszyn & Dyer Injury Firm, we see too many people pushed around by bad faith insurance companies in the Tampa Bay area. This might include PIP claims, fault-based auto insurance claims, uninsured motorist claims, business liability claims, and much more.

Our lawyers stand up to the largest insurance companies around, so never hesitate to call for a consultation right away.

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The Insurance Company’s Duty

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Every insurance contract contains an unwritten, invisible, or implied term imposing what the law refers to as the covenant or promise of good faith and fair dealing. This promise is imposed by law upon insurance companies, requiring them always to act fairly toward their insureds in handling their claims. Failing to comply with this implied contractual duty can lead to a claim against the insurance company for a bad faith handling of the insured’s claim.

Insurance companies must meet the reasonable expectations of their policyholders, and an insurer must always give as much consideration to the financial interests of its insureds as it does to its economic interests. Lucas, Macyszyn & Dyer Injury Firm aggressively pursues and, if necessary, litigates every insurance bad faith claim we handle to maximize our clients’ recovery.

The courts of Florida have held that an insurance company must use the same care and diligence as a person of ordinary care and prudence will exercise in handling that person’s own business. Because the insured or beneficiary has delegated control of the case to the insurance company, the law imposes a duty of good faith on that company.

The insurance company must advise the insured of settlement potential, the probable outcome of any litigation, the likelihood of an excess judgment, and steps to avoid such a judgment. The insurance company must also reasonably investigate the case, consider making a reasonable settlement offer, and settle the case where a reasonably prudent person would do so.

There are two main types of bad faith claims: bad faith handling of your claim and a bad faith refusal to pay money owed to you under your claim.

In addition to being required to act in good faith, insurance companies have several other duties to their client in Florida:

  • Duty to Disclose – Within 30 days of a written request from a claimant, the company must disclose
  • Insurer’s name
  • Insured’s name
  • Policy limits
  • Any potential defense reasonably available
  • Copy of the policy
  • Duty to Investigate – The insurance company must thoroughly investigate all claims against its insured
  • Duty to Advise/Inform – The insurance company must inform the insured of
  • Settlement opportunities
  • The probable outcome of litigation, including any potential for an excess judgment
  • Any steps available to avoid an excess judgment
  • Duty to Defend/Indemnify – The insurer must defend the insured under its policy. Florida law says the insurer must:
  • Employ attorneys for the insured
  • Engage in pre-trial investigation
  • Control the insured’s defense
  • Decide when and if to offer or accept an offer of settlement.

Duty to Settle – The insurer has a duty under Florida law to settle where liability is clear and the injuries are so severe that they make an excess judgment likely. If the insurer acts fraudulently or in bad faith in refusing to settle, it will be liable for any excess judgment. There is, however, no fixed timing for when a refusal to settle becomes a bad faith refusal. Generally, the greater the amount by which the likely damages exceed the policy limits, the shorter the period that a court will consider reasonable.

Florida Statutory Law on Bad Faith Handling of Insurance Claims

Florida law provides that any individual damaged by an insurer’s bad faith handling of their insurance claim through:

  • Not attempting in good faith to settle claims when a settlement should happen through good faith insurance handling
  • Making payments without a written statement explaining the coverage
  • Failing to settle a claim, except for liability coverage claims, when the obligation to settle is reasonably clear
  • Unfair or deceptive acts
  • Attempting to coerce a debtor
  • Refusing to sell or renew a policy for a person with a disability
  • Refusing to sell or renew a life insurance policy due to a sickle-cell trait
  • Refusing to sell or renew a disability policy due to a sickle-cell trait
  • Canceling motor vehicle insurance without promptly returning unearned premium balance
  • Fraudulently handling your policy or claim by failing to be registered to do so in Florida

Note that both the policy owner (first-party) and a potential beneficiary (third-party) of a given policy can make a bad faith handling of an insurance claim case.

Making a Statutory Case for Bad Faith

In making a case for a bad faith handling of your insurance claim, you do not have to prove that the way the insurance company treated you was the insurance company’s general business practice.

To make a bad faith claim, other than where the insurer is not registered, you must give the state department of insurance and the insurance company 60 days’ written notice of the violation. The department will also provide notice to the company.

The notice must be on a form supplied by the department and must include:

  • The statutory provision, including the statutory language, which you allege the insurer has violated
  • The facts and circumstances which comprise the alleged violation
  • The names of any individuals involved in the alleged violation
  • Any specific language from your policy relevant to the alleged violation, if any. If you are claiming as a third-party claimant, that is, it is not your policy, you do not have to reference language in the policy if the issuer has declined your written request for a copy of the policy.
  • A statement that you are giving the notice to perfect your right to pursue the remedy for a bad faith insurance claim according to Florida law.

Florida Common Law on Bad Faith Handling of Insurance Claims

The common law does not come from a statute; rather, it arises from court decisions relating to controversies in a particular area of law. In Florida, the courts recognize that a third party injured by the bad faith handling of an insurance claim has a cause of action directly against the insurance company because that third party is the real party in interest. That third party should not waste time, money, and judicial resources suing the insurance policy owner for the company’s bad faith conduct.

In a common law bad faith claim, the underlying conduct can entail:

  • Delaying, withholding, or denying benefits based on legitimate claims filed on valid policies
  • Failing to investigate a claim promptly and carefully
  • Refusing to pay a claim fairly or completely
  • Refusing to settle a case or reimburse for the entire loss at issue
  • Failing to defend or settle a claim against you within the policy limits and exposing you to personal liability

As you will see, these are similar to but not the same as the statutory bases for the claim. They both, however, boil down to failing to act in good faith toward you.

The Standard for Deciding Your Case

The Florida standard for evaluating a bad faith claim for either first or third parties under common and statutory law is whether the insurer acted fairly and honestly toward its insured with appropriate regard for the insured’s interests. The court will examine the insurance company’s actions under a totality of the circumstances viewpoint.

Factors the court may consider, whether the case involves a first or third party or statutory or common law, include but aren’t limited to:

  • Insurance company’s effort to resolve the case promptly or otherwise limit prejudice against the claimant
  • The substance of any coverage disputes and the existing law on the coverage issue
  • Insurance company’s diligence and thoroughness in investigating the coverage issues
  • Insurance company’s efforts to settle despite the coverage dispute

The finder of fact will evaluate an insurance company facing a coverage issue or a denial of a claim on essentially the same basis it would decide the original case between the parties based on:

  • Whether the insurer obtained a reservation of rights to deny coverage
  • Any prompt efforts to resolve the coverage dispute and limit prejudice against the claimants
  • The substance of the coverage dispute and the existing law
  • Insurer’s efforts in investigating the facts relevant to coverage
  • Insurer’s efforts to settle despite the dispute

Given these standards, under Florida law, the insurance company has a limited window in which it must:

  • Acknowledge coverage and assume the defense without a reservation of rights
  • Give the insured written notice of its refusal to defend
  • Obtain a non-waiver agreement after disclosing the relevant coverage defenses
  • Send a reservation of rights letter and appoint mutually agreeable defense counsel.

Preventing the Case for Bad Faith

The insurance company can end your case by paying the damages within 60 days of your notice or by correcting the circumstances to create the violation. The company must file a notice with the payment or corrective action with the insurance department.

At this point, you will receive payment on the original claim, but not any other damages you might have succeeded in recovering had the insurance company paid the claim. Of course, your likelihood of victory in a bad faith claim is very probably an influential factor in your insurance company taking this step precisely to avoid that bad faith claim.

Damages Available for Bad Faith Claim Handling

Damages that you claim for a bad faith insurance claim must be reasonably foreseeable consequential damages. These damages may exceed the policy limits of the underlying policy. Damages can include attorneys’ fees and costs, interest, and additional damages resulting from the insurance company’s acts relating to your claim.

The damages you can recover include:

  • Value of the initial claim – Assuming your initial claim was valid, you are still entitled to your damages
  • Recovery of any consequential costs – Any costs arising out of the delay, including your costs for the bad faith claim
  • Compensation for emotional distress – If you can prove it resulted directly from the bad faith claim

Punitive Damages for Bad Faith Claim Handling

The court can only award punitive damages in your case if the acts look like the insurance company’s general business practices.

The actions must also be:

  • Willful, wanton, and malicious
  • In reckless disregard of your rights as an insured
  • In reckless disregard of your rights as a beneficiary under a life insurance policy

If you want to maintain a case for punitive damages for a bad faith claim under Florida law, you will have to post discovery costs in advance. If you fail in your claim for punitive damages, the insurance company will receive the costs.

Mere Denial Does Not Establish Bad Faith

Just because your insurer denies your claim or pays a lesser amount does not bring an instant finding of bad faith. The party claiming bad faith must prove that the insurance company’s actions were in bad faith as defined under common law or the statute.

Florida courts recognize that insurance companies have a right to reject claims where they believe in good faith that they don’t owe benefits on the claim. Even if a court or arbitration panel later finds that the denial was a mistake, there is no cause of action if the insurance company denied the claim in good faith. Good and bad faith decisions are facts and circumstance issues and the fact-finder in a case usually determines them.

Contact a Tampa Bay Bad Faith Insurance Claim Attorney Today

Martin Macszyn

Tampa Bay Bad Faith Insurance Claims Law Firm , Martin Macyszyn, Esq.

If you believe you have been unfairly denied coverage or otherwise treated in bad faith by your insurance company, the skilled lawyers at Lucas, Macyszyn & Dyer Injury Firm will be happy to discuss your concerns with you. Contact us today or call (727) 849-5353 for a free initial consultation and case evaluation. Let us shoulder your stressful fight with an insurance company and allow you to return to the business of life.

Testimonial

I love how they took there time to please me with what outcome I wanted for my case! After watching my friend go through attorney after attorney with another firm , I did not go through that here! They are amazing, and honest about everything! Yvette hands down is the best paralegal! What a kind, beautiful women!! Martin is an amazing attorney who will fight for YOU!! If you want to win your case this is the attorney for you!! They always answer your questions and value your opinion! You guys are amazing!! Your customer service is like no other! Thank you! If I ever need an attorney again you’ve my business!

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If you or someone you love has been a victim of bad faith insurance, please contact our offices

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