Bad Faith

Florida Appeals Court Affirms Lower Court Decision in Insurance Claim Case

Published on: January 31, 2023 | by Friedman, Rodman & Frank, P.A.

In a recent case, the Third District Court of Appeals in Florida issued an opinion in an appeal involving an insurance claim between the Appellants, the plaintiff, and the Appellee, Citizens Property Insurance Corporation (Citizens). The plaintiff sued Citizens after a claim for hurricane damage he filed was denied by Citizens due to late notice. Citizens moved for summary judgment on the basis that the plaintiff failed to promptly report his claim. The trial court granted summary judgment, and the plaintiff appealed.

The plaintiff was issued a homeowners policy by Citizens. The policy expressly barred any hurricane claims filed outside of a three-year window. Additionally, the policy requires claimants to give prompt notice of damages for claims. In the aftermath of Hurricane Irma, the plaintiff’s home sustained interior and exterior damage to his residence. He retained a public adjuster, and two years and seven months after the storm, he reported a claim to Citizens. Citizens responded by denying the claim, stating that due to the length of time that had passed between the date of the loss and the date the loss was reported, Citizens considers the loss to be a late report claim. Citizens then assigned a field adjuster. According to the field adjuster’s report, due to the passage of time, he was unable to determine if the exterior or interior damages were the result of Hurricane Irma. Citizens requested photographs and documentary evidence from the public adjuster, without success, though the plaintiff did tender a written proof of loss. Citizens denied the claim, asserting late notice.

At trial, the plaintiff testified that he noticed leaks throughout his residence the day after the storm struck. He stated that he observed roof leaks and attempted to effectuate repairs using tar approximately one month after the hurricane. The next year, the plaintiff made more roof repairs, including tile replacement, but did not report damages to Citizen. The plaintiff cited a lack of fluency with the terms of his policy as the reason why he did not report the damage at the time.

Proof of Loss Requirement for Florida Home Insurance Claims

Published on: April 23, 2022 | by Friedman, Rodman & Frank, P.A.

Florida insurance companies review thousands of property damages claims a year. In an effort to expedite claims, companies require claimants to abide by various requirements. Many companies enforce a requirement to provide “sworn proof of loss.” Insurance companies claim that requirement allows them to assess claims quickly and fairly. Issues often arise when a claimant suffers a loss but fails to abide by the proof of loss requirement.

Several Florida cases address lawsuits involving a claimant’s failure to provide a sworn proof of loss. Together the cases hold that if a claimant files a lawsuit against an insurance company before submitting a required sworn proof of loss, the company is relieved of its duties under the policy, thus barring the lawsuit. However, if the claimant submits the proof of loss untimely, but before filing a lawsuit, courts will permit the lawsuits and determine whether the delay prejudiced the company.

Recently, a Florida appeals court issued an opinion addressing a case involving an untimely sworn proof of loss. The homeowner purchased an insurance policy from the company in 2017. A condition of the policy was that the insurance company had “no duty to provide coverage under this policy if the failure to comply with the following duties is prejudicial to us.” The homeowner appealed the lower court’s summary judgment ruling in favor of her home insurance company. At issue is a policy that requires the claimant to send a sworn proof of loss to the company within sixty days of the company’s request.

Excess Judgments Under Florida Bad-Faith Insurance Laws

Published on: April 16, 2022 | by Friedman, Rodman & Frank, P.A.

Under Florida law, those who bring a bad-faith claim against an insurance company for failing to settle a lawsuit must prove various elements. One element involves establishing that the insurance company’s conduct caused the insured’s loss. There are different ways to demonstrate this requisite caution element. One such method is by providing evidence that the insured experienced an “excess judgment” because of the company’s actions.

Typically, excess judgments must exist for the court to have jurisdiction to hear a Florida bad faith insurance claim. Excess judgments refer to instances when a judgment in a case is for a higher amount than the insured party has under their insurance policy limit. Excess judgments leave the at-fault party personally liable to the victim for their losses in these situations. Further, it fails to fully compensate the injury victim for damages because individual parties often lack the funds to pay a claim.

Bad faith arises when the insurance company owes the insured a duty, and the company breaches the duty, and because of the breach, an injury occurs. While Florida law requires insurance companies to settle a case where a reasonably prudent person would do so, mere negligence does not amount to bad faith.

Florida Bad Faith Insurance Dispute Over Delayed Appraisal Awards

Published on: March 25, 2022 | by Friedman, Rodman & Frank, P.A.

The District Court of Appeal issued an opinion in favor of a homeowner’s in a Florida bad faith insurance dispute. According to the record, lightning struck the homeowner’s residence in July 2009, causing serious property damage. The owner filed a claim with his insurance provider, who determined the amount of loss and made payments over eight years. However, in 2017 the homeowner disputed the paid amount, and the insurance company invoked the appraisal provision. While the appraisal process was ongoing, the owner filed a notice of his intent to file a bad faith claim against the insurance company. Amongst several claims, the insurance company argued that the sixty-day cure period was tolled pending the appraisal award and payment cured the bad faith allegations.

Under Florida law, insurance companies maintain two distinct duties: contractual and statutory. As such, first, they must timely evaluate and pay benefits. In most cases, the insurance policy conditions dictate how the parties must proceed before an insurer fulfills a claim. For example, as is the case in this situation, the provider might maintain the right to invoke an appraisal.

Second, they must act in reasonably good faith in evaluating claims. If a party experiences damages by an insurance company’s failure to comply, they may pursue civil action against the company.

Florida Insurance Disputes Stemming from Storm Damage

Published on: March 17, 2022 | by Friedman, Rodman & Frank, P.A.

The District Court of Appeal in Florida issued an opinion in an appeal stemming from an insurance dispute between an insurance company and the insured. The insurance company appealed a final judgment against them after a lower court found that the insured’s material breach of the contract was immaterial.

According to the record, storm damage prompted the homeowner to file a claim with the insurance company. The insurance company argued that the policy bars the homeowner from filing suit because he failed to comply with the three post-loss conditions in the insurance contract. Specifically, the violations include the homeowners’:

Failure to provide the insurance company with prompt notice of the loss.

Court Entitles Florida Homeowner to Recover Additional Funds in Insurance Dispute

Published on: February 28, 2022 | by Friedman, Rodman & Frank, P.A.

The District Court of Appeal in Florida issued a decision in an insurance coverage dispute in a case involving the insurance company’s liability provision. According to the facts, the insurance company insured the homeowner’s residence. A failed cast iron sanitary plumbing system in the home caused water to escape and cause damage to the dwelling. The cast-iron pipes deteriorated because of wear and tear, deterioration, and corrosion.

The insurance company permitted coverage for the water damage for $10,000, under the Limited Water Endorsement (LWD) in the policy. The homeowners claimed that the insurance company owed them additional funds for the cost of tearing out and replacing the concrete slab. The owners cited language in the primary policy, which stated that the company covered losses related to water damage, including the cost of tearing out and replacing necessary parts. Finally, the parties agree that the policy does not cover the repair or replacement costs of the corroded pipes.

The parties agree to most of the policy terms; however, they disagree with the liability provision in the LWD endorsement. The company argues that the $10,000 applies to water damage and the related costs, whereas the homeowners contend that the limitation applies only to the water damage.

Court Addresses Overbroad Terms in Florida Bad Faith Insurance Case

Published on: October 15, 2021 | by Friedman, Rodman & Frank, P.A.

An appellate court recently issued an opinion in a bad faith insurance lawsuit stemming from an accident between an 18-year-old driver and a motorcyclist. The accident occurred when the 18-year-old turned into a median in front of the biker. The biker slammed into the driver’s car with such force that the vehicle spun 180 degrees. The biker suffered serious injuries from the collision and was airlifted to a hospital.

The 18-year-old was driving his mother’s car at the time of the accident, and when he called the insurance company, he reported property damage but neglected to report any physical injuries. The insurance company interviewed the driver, who disclosed that the biker suffered injuries, and he indicated that the biker might have been speeding. The preliminary insurance investigation revealed that the accident occurred in a low-speed limit area, the motorcycle left long skid marks, and the driver did not receive a citation. With these facts, the insurance company concluded that the biker was likely contributorily negligent.

About ten days after the accident, the insurance company decided to tender the bodily injury limits to the biker; however, they asked the biker’s attorney if they could inspect the motorcycle. The next day the insurance company delivered a “tender package” to the biker’s attorney. The package included a cover sheet and described the content of the delivery, which included a $50,000 check and a form that released the company of “all claims.” The letter invited the biker’s attorney to edit the release or suggest changes to a release. The biker’s attorney did not address the release but rejected the offer stating the insurance company was trying to take advantage of the biker and his family by including an overbroad release.

Litigating Florida Bad Faith Insurance Disputes

Published on: April 22, 2021 | by Friedman, Rodman & Frank, P.A.

Under Florida’s no-fault insurance laws, drivers must carry Personal Injury Protection (PIP) coverage. This coverage pays a portion of the insured’s medical bills without consideration of fault. However, this protection only covers about 80% of a Florida injury victim’s medical expenses and even less for lost wages. As such, after an accident, Floridians often face an uphill battle in their efforts to recover the damages they deserve. In addition to personal injury lawsuits against the at-fault driver, victims may face challenges dealing with their insurance company. Despite their claims, insurance companies standing hinges on protecting their financial interests. Thus, insurance carriers will often improperly deny or delay claims, leaving victims in a tenuous financial position. Florida injury victims who find themselves in these precarious positions should contact an attorney to resolve these bad faith claims.

Recently, a Florida district court issued an opinion stemming from a dispute between the personal representative of an accident victim and an insurance company. The case arose after the victim suffered fatal injuries in a car accident with a volunteer employee of a not-for-profit corporation. The Estate obtained a judgment against the company the driver worked for; however, the Estate sought additional coverage with the not-for-profit’s insurance carrier. The insurance company asserted an “escape clause” in their coverage where they would not be responsible for incidents where another similar policy covers the not-for-profit. In this instance, the company had a GEICO insurance policy that covered the entity for liability because of the acts or omissions of an insured, such as the employee involved in the accident.

In this insurance dispute, amongst several issues, the Estate argued that the trial court improperly determined that the GEICO policy insured the not-for-profit. Generally, Florida insurance disputes require the court to interpret contracts. There are some general premises that courts use during this process:

The Civil Remedy Notice Requirement in a Florida Insurance Bad Faith Lawsuit

Published on: March 22, 2021 | by Friedman, Rodman & Frank, P.A.

After a Florida insurance claim, policyholders may file a first-party claim with their insurance company seeking benefits under the terms of the policy. First-party bad-faith claims occur when a policyholder sues their own insurance provider for unlawful and improper denial or settlement of a claim. Third-party bad faith actions have long been recognized; however, the Legislature enacted Florida Statute §624.155, to address first-party causes of action. Courts will evaluate the totality of the circumstances to determine whether an insurance provider has acted in good faith. Some of the common factors they evaluate are whether the insurance company investigated the facts, gave fair consideration to the circumstances, and settled the claim where possible. In cases where the insurance company did not engage in these steps, they may be held liable for their statutory breach.

A claimant may only recover against an insurance company if they meet the statute’s condition precedent. One of the condition precedents is filing a Civil Remedy Notice (CRN) with the Department of Financial Services (DFS). The failure to do meet this requirement may lead to a dismissal of a claimant’s case. For example, recently, an appellate court issued an opinion in a Florida homeowner’s claim against his insurance company. In that case, the insurance company disputed a property owner’s claim regarding water damage to his home. After filing a CRN, the property owner moved forward with a bad faith claim against the insurer. The court dismissed the complaint, reasoning that the plaintiff did not meet the requirements of the CRN.

The CRN statute outlines the specific information that a claimant must include in their notice. In sum, the notice must essentially specifically state the facts and circumstances surrounding the case, and the specific relevant policy language that the insurer is alleged to have breached. In this case, the court found that the plaintiff cited every provision in the insurance claim to meet the specificity requirement. The court found that citing every provision does not meet the specificity standard. The plaintiff argued that the insurance company’s failure to allow him to correct the defect meant that the CRN was sufficient. However, the court ruled that the insurer’s option to return a defective notice is discretionary. Therefore, because he did not meet the specificity standard, the court affirmed the trial court’s dismissal with prejudice.

What Can You Do if a Florida Insurance Company Denies Your Claim?

Published on: March 15, 2021 | by Friedman, Rodman & Frank, P.A.

To many people, even the thought of dealing with your insurance company is a headache. Unfortunately, insurance coverage is an important part of our lives, especially in areas such as home ownership, renter’s coverage, and auto insurance. When an insurance company in Florida acts in bad faith or causes damage to a policyholder because of their conduct, holding them accountable can be challenging without proper representation.

In a recent Florida District Court of Appeal case, the court considered whether a homeowner’s insurance claim was filed properly. According to the court’s opinion, the homeowner initially filed a claim with his homeowner’s insurance company for damages to his home that was caused by a fire.

The insurance company’s investigation revealed that the homeowner previously filed two plumbing claims and another claim for fire damage with a different insurance company. In addition, the insurance company discovered that after the homeowner received the insurance payout from one of the previous claims, he did not repair the damage. The company believed that earlier damage overlapped with damage from the current claim.