A Florida appellate court recently issued an opinion considering whether an insurance company acted in bad faith towards its policyholder when it failed to settle a claim. The claim arose when the insured slammed into another driver’s vehicle while driving drunk, pushing it in front of an oncoming train. The driver’s eight-year-old son was killed in the accident, and the driver suffered permanent injuries. After two years of criminal proceedings, the insured pleaded guilty, and the court sentenced him to 12 years in prison.
Following the accident, the insurance company tried to settle the claim with the victim and tender the entire policy limits to the woman and her son’s estate. The woman’s attorney stated that they were not ready to accept the payment and would await the culmination of the insured’s criminal proceeding. After the insured’s guilty plea, the woman’s new attorney advised the insurance company that they were ready to accept the settlement so long as it strictly complied with several provisions. Most relevant was that acceptance of the settlement would only release the insured and prohibited any indemnity provisions. The insurance company issued a check and stated that they satisfied all conditions. However, the woman’s attorney disagreed, and the insurance company responded that the attorney could strike any conditions they did not agree with. The attorney did not respond, and the woman filed a lawsuit against the driver in state court and won a judgment exceeding $10 million. The woman then filed a third-party bad faith lawsuit against the insurance company.
Under Florida law, insurance companies owe a good faith duty to their insureds in handling their claims. While the duty typically governs the relationship between the company and the insured, Florida law permits causes of action by the victim against the insurance company for its bad-faith failure to settle. The primary inquiry in these cases is whether the insurer diligently worked to settle the claim as if the victim were in the insured’s shoes. In this case, the victim argued that the company acted in bad faith by including overly broad release language. Although overbroad language can create a jury question, the court reasoned that it does not automatically amount to bad faith. Further, looking at the totality of the circumstances, it is clear that the insurance company attempted to settle the claim in a timely and fair manner. Ultimately, the court found that while the company’s action may have been negligent, it did not amount to bad faith.
Has Your Insurance Company Engaged in Bad Faith
If you have suffered injuries in a Florida car accident, the attorneys at Friedman Rodman Frank & Estrada can help you recover compensation for your losses. Our office handles Florida accident cases stemming from car, truck, boat accidents, premises liability, product liability, and medical malpractice. In addition, we offer legal counsel and representation when an insurance company fails to provide promised coverage. We have successfully represented claimants against insurance companies in cases involving fire loss claims, casualty insurance and health insurance bad faith, hurricane loss claims, life insurance claims, and more. Contact our office at 877-448-8585 to schedule a free initial consultation with an attorney on our team.