Under Florida law, first party insurers have a legal duty to handle all insurance claims using good faith settlement practices. At the most basic level, this means that insurance companies are obligated to act “honestly” and “fairly” towards insured parties. Unfortunately, all too often, insurance companies fail to live up to this responsibility. The following is a list of four common examples of bad faith insurance practices.
- Misrepresentation of the Facts
Insurance companies owe policyholders a fair assessment of the facts of the case. After all, insurers are placed in a position of power. This means that policyholders are forced to act according to their statements. If they misstate facts, it can lead to policyholders suffering serious damages. If an insurance company representative either intentionally or through negligence has misrepresented a material fact in your case, you should speak to a Fort Lauderdale bad faith insurance attorney immediately.
- Failure to Investigate the Claim
The failure to promptly and thoroughly investigate a claim is another example of a bad faith insurance practice. Lack of investigation can put the policyholder in a bad position. Insurance companies have an affirmative duty to conduct any necessary investigation.
- Unreasonable Delay in Settling the Claim
Delay in a settlement can cause serious financial distress for a policyholder. Insurance companies must settle valid claims without any unreasonable delay. Attempting to use a delay in settlement as leverage to offer to reduce the value of a settlement is the definition of a bad faith practice.
- Refusing to Pay a Valid Claim
Finally, a straight up denial of a valid claim can also lead to a bad faith insurance claim. Certainly, in some case, disputes over coverage can arise. It is possible for an insurance company to incorrectly deny a claim without having done so in bad faith. However, if a company denies or refuses to pay a full settlement on a clearly valid claim, the company may be held liable for bad faith practices.
How Bad Faith Claims Will Be Assessed By Florida Courts
Florida courts will assess bad faith insurance claims using a totality of the circumstances calculation. In other words, courts will attempt to weigh the actions and inactions of all parties involved to judge whether or not the insurance company acted in a fair, honest and reasonable manner. As was articulated by the Supreme Court of Florida in the case of State Farm Mut. Auto. Ins. Co. v. LaForet, factors that will be considered when assessing a bad faith insurance claim include:
- The level of diligence used by the insurer in investigating the claim;
- The efforts made by the insurance company to resolve the dispute in a timely manner;
- The reasonableness of any settlement offers that made by the insurer; and
- The actions of the policyholder, along with his or her willingness to work towards a resolution with the insurance company.
Do You Need Legal Assistance?
Our Fort Lauderdale property insurance dispute attorneys are standing by, ready to help. At Geyer Fuxa Tyler, we proudly represent policyholders throughout Broward County, including in Fort Lauderdale, Miramar, Coral Springs and Hollywood. To learn more about what our team can do for you, please contact our Sunrise office today to request your free case evaluation.
Resource:
leagle.com/decision/1995713658So2d55_1713/STATE%20FARM%20MUT.%20AUTO.%20INS.%20CO.%20v.%20LAFORET
