Drivers and vehicle owners dutifully pay their auto insurance premiums monthly or quarterly with the understanding they will receive a fair claims payout if the need arises. Unfortunately, far too many customers learn the hard way that insurers are primarily concerned with their own bottom line. But as our South Florida civil trial attorneys can explain, insurers are also bound by statutory and common law rules that compel them to act in good faith. Failure to abide by these rules in denying or delaying rightful claims can be the basis for a successful Florida bad faith insurance claim.
A bad faith insurance claim arises out of a contract dispute. By purchasing a policy and paying the premium, insureds are entering a contract with the insurer, who in turn promises to act in good faith and with fair dealing. That means they need to uphold their own policy provisions and the policyholders’ rights to receive that policy’s benefits. When a policyholder purchases insurance (and causes a crash or injury) the insurance contract itself will prevent the at-fault party from negotiating the dispute with the injured person directly. If during these negotiations (or worse denial of coverage) the insurer fails to meet these duties without good reason, the company can be held liable in a Florida bad faith claim. This can result first in the at-fault party being held personally responsible for a legal judgment that is far in excess of the insurance coverage they have purchased; next, as a result of Florida’s Bad Faith Laws, this excess judgment is something the insurance company itself will be responsible for paying.
Bad faith claims most often stem from:
- Unnecessary claim delays. Insurers are required to process claims in a reasonable amount of time and without needless delays.
- Policy cancellations. Our Fort Myers injury lawyers have seen cases where an insured files a claim, and the insurer immediately starts scouring their history for errors or any misrepresentation that might void the policy. This is really common when it comes to death benefits claims. Sometimes, it is for something as benign as a misspelled name – even though they had no problem collecting the monthly premium despite this error.
- Misrepresentations of policy. Some insurers will attempt to avoid paying claims by mischaracterizing the terms, requirements, and policy provisions. Many insurance policies are crafted with complex language and insider jargon, much of which favors the insurer. But it is well understood that any ambiguity is supposed to be construed in favor of the policyholder. Our experienced bad faith insurance attorneys can help.
- Ambiguous policy exclusions. Insurance policies can have all kinds of exclusions. But if an exclusion is ambiguous, it should be decided in the claimant’s favor.
- Denying paying for a valid claim with no reasonable basis. Insurers have a responsibility to pay valid claims and offer a reasonable basis when they deny them. Failure to do so may be bad faith. The same goes for low-ball settlement offers that are not justified.
- Low settlement offers which are often made without justification and for the benefit of the insurance companies bottom line and without regard for the insured.
These are just a few possible bases for a Florida bad faith insurance claim. Of course, denials may be valid in some cases, but working with an experienced injury lawyer at the outset of your injury case may reduce the chance that your insurer will try anything underhanded. And if they do, your attorney will help ensure their actions are well-documented and that they are held responsible.
Bad Faith Insurance Isn’t Just a Florida Problem
Bad faith insurance rules vary from state-to-state, but there are no shortages of bad faith insurance cases across the country. A couple of recent examples that made headlines:
An allegation of bad faith in Colorado involves a dying woman trying to resolve an uninsured motorist policy claim worth $350,000. The claim stems from an April 2019 rear-end collision with a driver who had no insurance. Two months after the crash, she underwent spinal surgery, which her doctor said was related to the crash. A year and six months later, the insurer has only paid $10,000 in UM coverage. She has since been diagnosed with Stage 4 terminal cancer. Her attorneys, who have filed a lawsuit for bad faith insurance on her behalf, say the auto insurer is now running down the clock in holding off denial of the claim.
A bad faith insurance case before the Georgia Supreme Court involves a $2.7 million default judgment following a serious bicycle accident. According to Claims Journal, a driver borrowed a friend’s car to drive to the grocery store. On the way, she struck a cyclist. The car owner notified her auto insurer. The driver was arrested for driving with a suspended license, but the car owner’s insurer still initially accepted responsibility. When the cyclist sued the driver, she reportedly tore up the summons. The case proceeded, but the defendant driver never showed. The court issued a default judgment in favor of the injured cyclist. The insurer did not pay, arguing the default judgment should be set aside because it was unaware of the court case until after the judgment. Lawyers for the cyclist say they gave the insurer a chance to settle the case for the $30,000 policy limit. The insurer refused to pay more than $12,400. That refusal became the basis for the ensuing bad faith claim. Attorneys for the cyclist filed an involuntary bankruptcy against the driver, which discharged her from debt but retained the insurer’s liability. The insurer’s bid to block this failed. A trustee for the driver’s estate then filed a bad faith claim against the insurer, arguing they should have paid the $30,000 settlement. Following a federal trial, the insurer was ordered to pay $2.7 million. The Georgia Supreme Court is now considering an appeal.
Bad faith insurance claims can be filed against auto insurers, property insurers, health care insurers, and more. They all have a duty to act in good faith. The best way to know for sure if your insurer has denied or delayed your claim in bad faith is to carefully document all your interactions with claims adjusters and insurer representatives and consult with an attorney with experience in bad faith insurance claims. The sooner you do this, the better, as first-party claims may require formal notice within 60 days.
If you are injured in Fort Myers, Naples or Key West, contact our injury attorneys at The Garvin Firm at 800.977.7017 for a free initial consultation.
F.S. 624.155, Bad Faith Insurance
More Blog Entries:
Factors That Can Affect Your Naples Personal Injury Lawsuit, June 25, 2020, Naples Injury Lawyer Blog