South Florida Personal Injury Lawyers Blog
A new opinion from the Florida Second District Court of Appeals offers necessary clarification for policyholders and injury victims pursuing bad-faith insurance claims. In Hancock v. Florida Farm Bureau General Insurance Company, the court addressed how juries should evaluate causation, specifically, whether the insurer’s conduct, rather than the insured’s own actions, caused excess damages beyond policy limits.
This ruling reinforces that proving bad faith in Florida depends on showing a direct link between the insurer’s failure to act reasonably and the harm suffered by the insured. The decision also highlights how careful claim handling, clear communication, and timely settlement offers can prevent unnecessary litigation.
Causation and Liability in Florida Personal Injury Insurance Disputes
The dispute arose after an automobile accident led to a personal injury claim against the insured. The injured party made a settlement demand within policy limits, but the insurer failed to accept the offer before it expired. When a jury later awarded damages far above the policy limit, the insured sued the insurer for bad faith, arguing that the company’s delay and lack of clear communication caused the excess judgment.
The trial court found in favor of the insured, but the insurer appealed, challenging the jury instructions on causation. The insurer claimed the trial court failed to clarify that the insured must prove the insurer’s conduct, not external factors, caused the loss.
The Appellate Court’s Analysis
The Second District Court of Appeal agreed that causation is central to every bad faith claim. Florida law recognizes that insurers owe a duty of good faith to their policyholders, including the duty to investigate, communicate, and settle claims when appropriate promptly. A bad-faith claim is not automatic when a policy limit is exceeded. The plaintiff must show that the insurer’s unreasonable conduct directly led to that outcome.
The appellate court reaffirmed this principle by emphasizing that juries must be instructed appropriately to separate an insurer’s fault from any independent causes, such as the claimant’s demands or changes in litigation strategy. The court also clarified that causation cannot rest on speculation, it must be supported by evidence that the insurer’s delay, miscommunication, or refusal to negotiate caused the insured’s financial exposure.
Importance of Causation in Florida Bad Faith Law
Causation distinguishes legitimate bad-faith claims from simple coverage disputes. Even when an insurer mishandles a claim, bad faith exists only if that conduct results in harm that would not have occurred with proper handling. Courts expect clear evidence that the insurer’s actions were the legal cause of the insured’s excess judgment.
For example, if a claimant withdraws a settlement offer before the insurer can reasonably respond, causation may be difficult to prove. On the other hand, if an insurer ignores repeated settlement demands or misleads the policyholder about claim status, those actions can create a direct causal link to excess liability.
This standard ensures that insurers cannot avoid accountability for unreasonable conduct, while also preventing liability when the outcome stems from factors beyond their control.
Implications for Personal Injury Victims and Policyholders
In Florida, bad-faith claims often arise after serious injury accidents where insurance coverage falls short of medical costs and long-term losses. The Hancock opinion strengthens the requirement for detailed proof of how an insurer’s failure to settle caused additional damages.
For injury victims, this ruling underscores the importance of documentation. Keeping detailed records of settlement communications, demand letters, and insurer responses provides critical evidence in any future claim. For policyholders, it is a reminder that cooperation with counsel and clear communication with the insurer remain essential to preserving potential bad-faith remedies.
Common Signs of Potential Bad Faith
While every case is unique, Florida courts and regulators recognize several warning signs that an insurer may be acting in bad faith:
- Failing to respond to or acknowledge settlement demands;
- Delaying investigation or ignoring requests for updates;
- Misrepresenting coverage or policy limits;
- Failing to provide a reasonable explanation for claim denial; and
- Prioritizing the insurer’s financial interest over the insured’s exposure to loss.
When these behaviors occur, policyholders may face personal financial risk, especially when claims exceed policy limits. Legal action may be necessary to recover damages caused by an insurer’s mishandling.
How Experienced Representation Helps
Proving bad faith requires both a strong factual record and a clear understanding of Florida’s legal framework. The right attorney will analyze claim files, correspondence, and timelines to identify where an insurer’s conduct crossed the line. Skilled lawyers also know how to work with insurance experts who can explain to a jury why the company’s actions violated industry standards.
Insurance carriers rely on technical defenses and procedural challenges. Having representation familiar with Florida’s appellate guidance on causation ensures that jury instructions and evidence meet the state’s evolving legal standards.
Speak With a Florida Insurance Bad Faith Lawyer
If your insurer mishandled your injury claim or refused to settle within policy limits, you may have a bad-faith insurance claim under Florida law. The attorneys at Friedman Rodman Frank & Estrada, P.A., help policyholders and accident victims pursue fair compensation when insurance companies act unreasonably.
Call (305) 448-8585 for a free consultation. Our team represents clients statewide in personal injury, wrongful death, and insurance bad-faith matters. We will review your claim, explain your options, and fight to hold insurers accountable when their conduct causes preventable harm.