Comparative Fault in Florida Bad Faith Lawsuits: How Policyholder Conduct Can Affect Damages

Over the years, Florida’s bad-faith insurance laws have undergone significant changes, and policyholders looking to file bad-faith claims should understand how these changes affect their rights. One of the most significant changes occurred in 2023, when Governor Ron DeSantis signed House Bill 837 (HB 837) into law. Apart from reducing the statute of limitations for general negligence claims from four to two years and modifying the state’s comparative negligence model, this bill also introduced comparative fault into bad faith claims. In simple words, this means that what a policyholder or their representative does during the claims process can directly affect how much compensation they may ultimately recover.

A Brief Overview of Bad Faith Insurance Claims in Florida

According to Florida Statutes Section 624.155, an insurance bad faith claim arises when an insurer does not handle a claim fairly, honestly, and with due regard for the insured’s interests. In Florida, policyholders can pursue bad-faith claims when an insurer’s conduct causes damages that exceed policy benefits, or results in wrongful denial, improper delay, or unfair settlement practices.

The focus in these cases is on the insurer’s behavior. However, HB 837 now requires consideration of the actions of all parties involved in the claim. This means it is no longer just about what the insurer did or didn’t do, but also about how you, as an insured or your representative, acted during the claims process.

The Introduction of Comparative Fault in Insurance Bad Faith Cases

Under HB 837, policyholders, claimants, and their representatives have a legal obligation to act in good faith throughout the claims process. According to the law, you are required to show that you acted in good faith when furnishing information to your insurer, making settlement demands, setting deadlines, and attempting to resolve the claim. If a jury finds that you did not act in good faith, it may reasonably reduce the amount of damages awarded in your bad faith lawsuit.

It is vital to note that this does not establish a new cause of action against policyholders. Instead, it is a provision that limits damages that applies after bad faith has been proven.

Examples of Conduct That May Affect Damages

Every insurance bad faith claim is different. However, here are some examples of conduct that could lead to damages being diminished:

• Withholding or delaying the provision of key information
• Making settlement demands with unrealistic conditions of settlement
• Imposing unrealistic deadlines

Even when an insurance company mishandles a claim, this type of conduct by the insured, claimant, or their representative can affect the amount of compensation ultimately awarded.

What Remains Unchanged for Policyholders?

Despite these changes, insurers remain obligated to manage claims fairly and honestly. HB 837 does not excuse unreasonable delays, inadequate investigations, or a failure to properly assess settlement options. Insurers can still be held accountable when their actions cause damage.

Contact Us for Legal Help

If you believe your insurer acted in bad faith or you have concerns about how to avoid arguments of comparative bad faith, an experienced Tampa insurance bad faith lawyer at Gunn Law Group, PA can help. Contact our office today to discuss your situation.

Source:

flsenate.gov/Session/Bill/2023/837/BillText/er/PDF