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Excess Judgments Under Florida Bad-Faith Insurance Laws

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.

Recently, the Eleventh Circuit addressed this issue and reversed a district court’s decision. The case stems from an incident when a driver driving the insured’s car negligently changed lanes and slammed into another person, seriously injuring them. The car owner had an insurance policy that provided bodily-injury coverage. Both the victim and insurance company assert they made settlement offers within limits; however, the parties could not reach a settlement.

The driver and car owner filed a lawsuit against the insurance company, alleging bad faith. They sought to recover the amount of the final judgments entered against them that exceeded the policy limit. The plaintiffs contended that the insurance company breached its fiduciary duty by failing to settle the victim’s case within the policy limit. They argued that Florida law does not require that a verdict precede an excess judgment as a prerequisite to proving the causation element of an insurer-bad-faith claim. The Eleventh Circuit found that plaintiffs’ available coverage and final judgments entered against them constitute excess judgments. Thus, the plaintiffs successfully established the causation element of their bad-faith case.

Are You Looking for a Florida Bad Faith Insurance Claim Attorney

If you have suffered injuries in an accident or believe that your insurance company is mishandling your claim, contact the Florida attorneys at Friedman Rodman Frank & Estrada to discuss your case. In addition to premises liability, medical malpractice, and wrongful death claims, our firm handles Florida bad faith insurance claims. Our office has successfully represented Florida clients in their first-party and third-party bad faith insurance claims. We have recovered significant amounts of compensation from negligent individuals, companies, organizations, and insurance companies. Contact our office at 877-448-8585 to schedule a free initial consultation with an attorney on our team.

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