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.