Insurance Disputes and Bad Faith

Often, after someone experiences an injury or property damage due to an accident, you will hear the words “this is what insurance is for.” People pay insurance premiums for their homes, vehicles, health and disability and, in turn, expect to be covered when an accident or incident occurs that could potentially cause financial ruin. We all like to assume that the insurance company will put our best interests above their financial profit. Unfortunately for many people, the peace of mind that they believe their monthly premiums afford them can be taken away by an insurance company that does not act to protect their interests.

Florida has adopted special laws to make sure insurance companies treat Florida residents fairly when handling claims. Florida has an “unfair claim settlement practice” statute setting forth the duties of insurers. Violations of these duties are frequently called “bad faith” claims.

Insurance companies have two main obligations under an insurance liability policy. First, the insurance company must investigate and defend its insured against any claim or lawsuit. Second, the insurance company must pay, up to the coverage limits, for any damages caused by the conduct of their insured. If the insurance company, in an effort to save money, attempts to defend a case that should and could have been settled and, thereafter, results in a judgment being entered against their insured which exceeds the policy limits, then their insured is left to personally pay for the amount of damages which exceed the policy limits. This personal exposure to the insured is oftentimes caused by improper actions by an insurance adjuster or poor policies and procedures instituted by an insurance company. Failure to properly investigate a claim, failure to respond to settlement offers, or failure to confirm or deny coverage are just a few of the common examples of poor insurance company claim management practices.