What Damages Are Available in a Florida Insurance Bad Faith Claim?
When you purchase insurance, you expect that when you or someone else files a claim against your policy, your insurer will process your claim promptly, honestly, and fairly. Unfortunately, that is not always the case. Some insurers deny valid claims, delay payments, or attempt to settle claims for far less than they are worth. In Florida, insurance companies have a legal obligation to act in good faith when handling insurance claims. When an insurer breaches its good faith obligations, the policyholder may have the option to file a bad faith claim and seek damages. In this article, we discuss the types of damages that may be available in a Florida insurance bad faith claim.
Understanding Insurance Bad Faith in Florida
Florida law requires insurance companies to manage claims with honesty and fairness. Insurers have a responsibility to review the merits of all claims and make reasonable decisions to handle and process them in accordance with the law and their contractual obligations. According to Florida Statutes section 624.155, an insurer is considered to be acting in bad faith when it fails to settle a claim when, under all the circumstances, it could and should have settled had it treated its policyholder fairly and honestly and with due regard for her or his interests.
The law allows insureds to file a lawsuit against insurers when the companies act in bad faith. Here are some of the situations that may warrant filing a bad faith claim:
- Delaying to investigate the claim
- Failing to investigate the claim properly
- Refusing to pay a valid claim
- Failing to commentate or respond promptly
However, according to the law, before you can file a bad faith lawsuit against your own insurance company, you are required to give your insurer written notice and allow them 60 days to remedy the alleged bad faith actions. If the insurance company doesn’t fix the issue within that time, you can proceed with your lawsuit.
Types of Damages Available in a Florida Bad Faith Claim
In a successful Florida insurance bad faith claim, you can recover different types of damages, including the following;
The Value of the Initial Claim
Typically, a bad-faith claim arises when an insurer mishandles a legitimate claim. In the context of a liability policy, the value of the claim may be determined by a jury verdict which is then reduced to a judgment in excess of the available policy limits.
Statutory Interest
If properly preserved, this excess judgment will accrue interest at the rates set forth in Florida Statutes § 55.03. The interest on this judgment is then recoverable as damages in the subsequent bad faith action.
Attorney’s Fees and Costs
Bad faith actions are legally complex, and can require hundreds of hours of legal work to reach resolution. Another category of damages awardable against an insurance company who failed to handle a claim in bad faith are reasonable attorney’s fees and litigation costs. The law in this area is in dispute, and you should consult an experienced insurance bad faith attorney to discuss your full potential remedies.
Punitive Damages
Punitive damages are rarely recoverable in bad faith lawsuits. According to the law, punitive damages are only recoverable when the insurer’s actions occur with such frequency as to indicate a general business practice and are willful, malicious, or in reckless disregard of the insured’s rights.
Contact Us for Legal Help
Our Tampa insurance bad faith lawyers at Gunn Law Group, P.A., has experience handling bad faith insurance claims in Florida. Contact us today to schedule a consultation and discuss your case.
Source:
leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0600-0699/0624/Sections/0624.155.html
