Articles Posted in Bad Faith

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.

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.

Many people purchase insurance to protect against economic losses stemming from personal injury or property damage. In exchange for premiums, the insurance company must uphold its duties to the policyholder. The duties include providing coverage, paying valid claims, and adhering to the policy’s terms. Policyholders who believe their insurance company is violating their agreement may file a Florida bad faith claim against their insurer.

Insurance bad faith claims fall under first-party and third-party claims. Third-party bad faith insurance claims typically involve liability insurance. Bad faith claims occur when an insurer breached their duty to defend their policyholder and pay costs. Common examples of third-party insurance include, liability insurance, malpractice insurance, and commercial liability insurance. First-party insurance is a claim against a policyholder’s insurance company. Bad faith claims arise when a policyholder’s insurance company fails to pay a claim without an appropriate investigation or basis for a denial. This often includes claims against a health or homeowner’s insurance provider, but also in claims involving an accident with an uninsured or underinsured driver.

Under Florida law, a policyholder may file a first-party bad faith claim against their insurance provider. A lawsuit is appropriate if the insurer failed to engage in good faith by acting fairly and honestly towards its policyholder. For example, an appellate court recently issued an opinion in a homeowner’s appeal of a judgment in favor of their insurance company. In that case, a water supply line burst in the homeowners’ home. Following the burst, the homeowners’ filed a claim under their insurance policy. Their insurance company investigated the claim and tendered a payment the homeowners thought was insufficient. In response, the owners filed a civil remedy notice (CRN) alleging bad faith violations. They also asserted an amount that could cure the violations. The insurance company acknowledged the CRN, and the matter proceeded to appraisal. Following the appraisal, the company paid an amount less than the homeowners’ requested.

Recently, a Florida appellate court issued an opinion in an insured’s appeal of a circuit court’s final order granting her insurance company’s motion to dismiss her claim for bad faith. According to the court’s opinion, the plaintiff filed a claim with her insurance company for damages to her home from a hurricane. The homeowner claims that, despite admitting the loss was covered, the insurance company “grossly undervalued the claim” and “refused to negotiate the damages.” An appraisal panel found that the damages the woman claimed were appropriate, further supporting the woman’s contentions against the company.

Abiding by the condition precedent to bringing a bad faith action, the woman filed a civil remedy notice (CRN) with the Department of Financial Services (DFS) and the insurer. Within sixty days of the DFS’s acceptance of the CRN, the company did not pay damages. Thus, the homeowner argued that the company committed bad faith in adjusting her claim. The insurance company argued that the notice was ineffective because the CRN misidentified the insurer. The homeowner appealed a circuit court’s ruling in favor of the insurance company, arguing that the company waived their argument by not raising it in its response to the CRN.

On appeal, the homeowner argued that the insurance company never claimed that the incorrect identification caused it any prejudice. Instead, the plaintiff claimed that the insurance company simply denied the claim and argued that the loss did not exceed the policy’s deductible, without attempting a cure. Second, the company had actual notice of the CRN within the cure period and responded to the notice. Next, the company waived any misnomer defects by timely responding without any objections. Finally, the company’s failure to note the misnomer in its CRN response, and failure to bring the defect to her attention, warrants the application of estoppel principles. The insurance company argued that the plaintiff’s claim failed to satisfy the condition precedents because it was filed against another company, the CRN was legally insufficient, and the company could not cure the defect.

Owning a home is a major milestone, but also comes with significant responsibilities and costs. Unlike renting, maintenance is no longer a call away to help fix things when they break or leak in your home. Home insurance, however, can often provide recourse in unexpected situations that are out of your control. These insurance policies often have specific rules and instructions on how to file a claim in the event of an issue that gives rise to a claim. As a homeowner, it is crucial that you read and understand these rules so that if an incident arises in your home, you can properly assert your rights for recovery.

In a recent Florida District Court of Appeal opinion, a homeowner filed a lawsuit against his home insurance company, arguing that they had breached their contract. The plaintiff’s home was insured by the defendant. The insurance policy provided that in the event of a loss giving rise to the claim, the homeowner must provide “prompt notice” to the defendant, give the defendant the requested records and documents, and submit to an examination under oath to recover for the loss.

Following a major plumbing leak incident in the homeowner’s house, the plaintiff provided notice and documentation of loss, but failed to show up for his examination under oath because he was out of the country and unaware that the examination under oath had been scheduled. The defendant subsequently denied the plaintiff’s claim, arguing that the plaintiff had breached the insurance policy’s requirements. The lower court ruled in favor of the defendant, and the plaintiff appealed.

Recently, an appellate court issued its opinion in a bad faith claim homeowners filed against their home insurance company. According to the court’s opinion, the homeowners filed a claim with their insurance company after suffering losses from Hurricane Irma. The insurance company investigated the claim and determined that the homeowners’ loss was $3,013.20. In response, the homeowners provided the insurance company with their public adjustor’s estimate of their losses. According to the insurance agreement, the insurer began the appraisal process. The policy contained provisions that either party could demand an appraisal if the parties failed to agree to the amount of loss. Further, the policy included a provision that homeowners could not file a lawsuit unless the parties fully complied with the policy’s terms.

The homeowners filed a civil remedy notice of insurer’s violation (CRN), alleging that the insurance company breached its duty to settle the claims in good faith. They argued that the company was given notice of the severity of the homeowners’ losses, and the opportunity to inspect the property. The homeowners contended that, despite this opportunity, the insurer failed to identify the full extent of losses. As such, they filed a complaint based on Florida’s bad faith statute.

Under Florida Statutes, section 624.155, policyholders maintain a civil remedy for an insurance company’s bad faith. The claim applies in situations that an insurer failed to act reasonably, honestly, and in good faith to settle claims. Florida law requires plaintiffs to provide the Florida Department of Financial Services and the insurer with written notice of a violation. The CRN notice must include specific statutory violations, relevant facts and policy provisions, and a statement asserting the plaintiff’s right to pursue a civil claim. The statuary requirements to a Florida bad faith insurance claim require the claimant establish that the insurer was liable for coverage, the policy holder’s damages, and compliance with the notice requirements. The statute does not bar an insured from sending a CRN before a determination of liability or damages.

The United States Tenth Circuit Court of Appeals recently published an opinion that reversed a lower court’s ruling in favor of the defendant, concerning the plaintiff’s claim that the insurer wrongfully delayed the payment of benefits for her personal injury claim. The appeals court’s reversal of the lower court’s granting of summary judgment to the defendant on this claim will result in the case going back down and proceeding toward a trial if the parties are unable to settle before that time.The plaintiff in the case of Peden v. State Farm had been seriously injured while riding in a car that was involved in a DUI accident, and she allegedly suffered damages in excess of the policy limits of the insurance held by the driver of the vehicle involved in the crash. Before filing suit, the plaintiff made a claim with the defendant, seeking compensation for her injuries, and she was paid the maximum amount under the driver’s bodily injury liability policy limit. She sought the balance of her damages through her own policy’s uninsured/underinsured motorist coverage, but her claim was denied.

The Plaintiff Files a Lawsuit to Enforce Underinsured Motorist Claim and Alleges Bad Faith by the Defendant

After her claim for underinsured motorist protection coverage was denied, the woman filed a personal injury lawsuit against the defendant in federal court to enforce the full benefits of the coverage. In addition to her claim for compensation related to the damages she suffered, she sought additional damages, as permitted under Colorado law, since the defendant denied her initial claim without good reason or even a proper investigation, forcing her to bring a claim that should not have been necessary. After the lawsuit was filed, the defendant paid out the full amount of coverage.

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