Bad Faith Insurance Claims: The Basics
Insurance companies in the United States are legally obligated to act in “good faith” when a claim is filed against one of their poly holders. Good faith is a legal term of art that, in a nutshell, means honoring the obligation to pay valid claims without attempting to escape this obligation to pay. Insurance providers who fail to handle claims filed against them in good faith can be sued for bad faith.
Bad faith insurance claims can arise under a wide variety of different circumstances, but common examples include:
- Denying payment of a valid claim,
- Fraudulently denying insurance coverage,
- Intentionally failing to pay the full value of a claim,
- Making unreasonable lowball settlement offers,
- Refusing a claim without first conducting a reasonable investigation,
- Taking an unreasonable amount of time to respond, and
- Failing to communicate essential information.
When a Florida court finds that a policyholder was injured by a bad faith insurance practice he/she is entitled to recover all of the damages that they suffered as a cause of the bad faith violation, plus punitive damages (in some cases). These damages can often be broken down into the following categories:
- Consequential Damages: Consequential damages include those damages that the plaintiff suffered which are a reasonably foreseeable result of the violation. This includes recovery of the value of the initial valid claim (minus any portion already paid by the defendant) plus any additional costs incurred because of the delay.
- Punitive Damages: The court will also award punitive damages (designed to punish the defendant) under a limited number of circumstances. Punitive damages will generally only be awarded if the defendant’s bad faith insurance practices were (1) wanton, willful, and malicious, or demonstrated a reckless disregard for the insured’s rights and (2) so frequent that they indicate a general business practice.
- Court Costs and Attorney’s Fees: The court may also order the defendant in a bad faith insurance lawsuit to pay the plaintiff’s court costs and reasonable attorney’s fees.
Let Us Assist You with Your Case
If you’ve fallen victim to bad faith insurance practices in Florida the experienced insurance dispute lawyers at Piccin & Glynn, Attorneys at Law, are here to help. Make sure that the insurance company that acted in bad faith not only pays what you are owed under their insurance policy but also pays for violating Florida’s good faith insurance statute. To discuss your legal options during a free consultation contact our Ocala office today at (866) 225-6459.