Florida Insurance Bad Faith Claims and an Insurance Company’s Duty to Policyholders

Insurance companies play a vital role in most Florida car accident cases and are expected to abide by the terms of their policies faithfully. However, in many instances, insurance companies wrongfully deny claims, and Florida personal injury victims end up in lengthy and costly disputes. These disputes can take longstanding financial, physical, and emotional tolls on Florida car accident victims. Florida has several statutes and remedies in place to hold insurance companies liable for delaying or wrongfully denying claims. Floridians who are at a standstill with an insurance company should retain an experienced attorney to help them get their rightfully due damages.

Florida motorists typically purchase automobile coverage with the expectation that the company will provide them with financial protection if they are involved in an accident. Insurance companies must deal with their policyholders in “good faith” and with “fair dealing.” These terms mean that the insurance company must treat their policyholders fairly and carefully when determining the validity of a claim, and settle claims against the insured within the agreed-upon coverage limit. Insurance companies act in bad faith when they refuse to pay or settle a claim without a reasonable basis, fail to promptly and adequately investigate or defend a claim without justification, implement deceptive practices to avoid paying a claim, or refuse to offer the full value of a claim.

There are generally two types of Florida bad faith insurance claims, first-party and third-party claims. First-party insurance claims occur when a Florida motorist’s insurance company fails to address and pay a claim adequately. This typically occurs when a Florida driver evokes their policy’s underinsured or uninsured coverage.

Third-party claims arise when an insurance company fails to defend a lawful claim against the insured by an injured third party. In these cases, Florida law allows the injured third-party to bring a bad-faith lawsuit directly against the insurance company. For example, a federal appellate court recently issued an opinion stemming from a third-party bad-faith claim. In that case, the injury victim settled with the at-fault party under a specific state statute, which allowed the victim to effectuate the complaint directly with the at-fault party’s insurance provider. The plaintiff argued that the insurance company denied her claim in bad faith and breached its contract with the insured. She further contended that the jury was improperly instructed not to address bad faith unless there was a breach of contract. The court found that, in that specific case, the insurance company did not breach its agreement, and therefore the jury did not require the bad-faith instruction.

Have You Been Involved in an Insurance Dispute After a Florida Car Accident?

If you or someone you know has been involved in a Florida car accident with a negligent driver, you should contact the attorneys at Friedman, Rodman & Frank. The South Florida attorneys at our law firm have extensive experience handling complex lawsuits against insurance companies and negligent drivers. Our attorneys have successfully resolved countless personal injury cases on behalf of Florida drivers and passengers over the last four decades. Contact our office at 877-448-8585 to schedule a free consultation with one of our Florida injury attorneys.

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