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.
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. The Tampa Bay lawyers at Lucas, Macyszyn & Dyer Injury Firm aggressively pursue and, if necessary, litigate 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 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.
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 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:
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 Florida standard for evaluating a bad faith claim for either first or third parties under common and statutory law (Florida Statutes § 624.155) 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:
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:
Given these standards, under Florida law, the insurance company has a limited window in which it must:
The insurance company can end your case by paying the damages within 60 days of your notice or by correcting the circumstances that created 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 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 Tampa Bay bad faith insurance claim.
The damages you can recover include:
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:
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.
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 fact and circumstance issues, and the fact-finder in a case usually determines them.
Fl. Stat. § 624.155 provides that any individual damaged by an insurer’s bad faith handling of their insurance claim through:
As a Tampa Bay attorney can further explain, 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.
If you believe you have been unfairly denied coverage or otherwise treated in bad faith by your insurance company, a skilled Tampa Bay bad faith insurance claims lawyer at Lucas, Macyszyn & Dyer Injury Firm will be happy to discuss your concerns with you. Contact us today or call (727) 591-3933 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.
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