First-Party vs. Third-Party Bad Faith Claims in Florida

When you pay for insurance, you expect your provider to respond to claims fairly and promptly. Unfortunately, that does not always happen. In Florida, insurance companies have a legal duty to treat policyholders honestly and handle claims in good faith. When they fail to do so, it may result in a bad-faith insurance claim. Understanding how these claims work is vital.

Insurance bad faith claims generally fall into two main categories: first-party and third-party claims. In this article, we look at the difference between these two types of claims in Florida.

What Is Insurance Bad Faith?

Insurance bad faith occurs when an insurance company fails to meet its responsibilities under a policy. This can mean delaying payments, denying legitimate claims without a valid reason, failing to investigate a claim properly, or offering significantly less than a claim is worth. Florida law requires insurers to act fairly and promptly in handling claims, and policyholders have the right to hold them accountable if they don’t.

What Is a First-Party Bad Faith Claim?

A first-party bad faith claim comes into play when you file a claim with your own insurance company, and they mishandle it. This type of claim is often seen in cases involving property insurance, health insurance, or uninsured motorist coverage.

For example, after a car accident with an uninsured driver, you might file a claim with your own insurer for damages. If the insurer takes too long to process your claim, underpays you, or denies your claim without a good reason, that could constitute bad faith.

In Florida, before you can file a lawsuit for first-party bad faith, you usually need to submit a Civil Remedy Notice (CRN). This notice, mandated under Florida Statutes section 624.155, gives the insurance company 60 days to resolve the issue. If they don’t fix the problem within that timeframe, you can then move forward with a bad-faith lawsuit.

What’s a Third-Party Bad Faith Claim?

A third-party bad-faith claim arises when an insurance company fails to act fairly in handling a claim brought by someone other than the policyholder, usually an injured person seeking compensation from the policyholder. In these situations, the insurer has a duty to properly evaluate the claim, investigate it promptly, and attempt to reach a reasonable settlement when appropriate.

Bad faith may occur if the insurance company refuses to pay a valid claim without a reasonable basis, delays the investigation, or fails to engage in fair settlement negotiations. These actions can expose the policyholder to greater financial risk, which is why Florida law allows bad faith claims when insurers fail to meet their obligations.

Protecting Your Rights as a Policyholder

If you believe an insurance company is acting in bad faith, it is important to act quickly. Keep records of all communications, document delays or denials, and review your policy carefully. Insurance companies often rely on complex language and procedures, which can make it difficult for policyholders to recognize unfair practices. Consulting an experienced attorney can make a significant difference. A qualified attorney can evaluate your situation, explain your rights under Florida law, and help you pursue compensation if your insurer has acted improperly.

Contact Us for Legal Help

If you believe your insurance company is acting in bad faith, contact an experienced Tampa insurance bad faith lawyer at Gunn Law Group P.A. today to review your case, protect your rights, and help you pursue the compensation you deserve.

Source:

leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0600-0699/0624/Sections/0624.155.html