As a homeowner in Florida, dealing with damage to your property is stressful enough, but what happens when your insurance company isn’t acting in good faith? Unfortunately, bad faith insurance practices are not uncommon, and understanding how to recognize them is essential to protecting your rights and ensuring you get the compensation you’re entitled to.
In this blog, we’ll walk through the examples of bad faith insurance practices and what to do if you suspect you’re being treated unfairly.
Florida’s Bad Faith Insurance Law
Bad faith insurance law in Florida is governed by Fla. Stat. § 624.155. If your insurance company fails to fulfill its obligations to you as the policyholder in a fair and reasonable manner, it may be acting in bad faith. Bad faith encompasses the following:
- Failing to attempt to settle a claim in good faith when it could have done so had it acted fairly and honestly towards its insured and with due regard for their interests.
- Failing to conduct a reasonable investigation based upon all available information.
- Refusing to settle the claim when it is clear that the insurer should have done so if it had acted fairly and honestly toward its insured and with due regard for their interests.
Recent changes to legislation, specifically Florida Tort Reform HB 837, are also affecting bad faith lawsuits in Florida. One noteworthy change has to do with time limits. Per the law, insurers essentially have a safe harbor from bad faith demands for 90 days from when the claim was filed. They can use these approximate three months to make a claim determination and cannot be accused of acting in bad faith during this time.
Common Signs of Bad Faith Insurance Practices
Knowing how to spot bad faith insurance practices can prevent you from falling victim to unfair treatment. Here are the key signs to watch out for:
- Unjustified claim denial – One of the most blatant signs of bad faith is the outright denial of your claim without a valid reason. Insurers must provide a detailed explanation for why a claim is denied, and if the denial lacks proper justification or seems to be based on unreasonable grounds, you could be facing bad faith practices.
- Excessive delays – While some delays are expected in the claim process, excessive or unexplained delays can be a sign of bad faith.
- Inadequate communication – If you’re struggling to get in touch with your insurance adjuster or receiving little to no response to your inquiries, this is another red flag. Bad faith insurers often avoid communicating with policyholders and leave them in the dark about the status of their claims.
- Lowball settlement offers – A common tactic used by bad faith insurers is offering an unreasonably low settlement that doesn’t even come close to covering the damages outlined in your claim. They may pressure you into accepting the offer by emphasizing long delays or threatening a full denial.
- Misrepresentation of policy terms – Sometimes, an insurance company will misinterpret or intentionally misrepresent the terms of your policy to avoid paying out. This could include incorrectly stating that certain damages aren’t covered when they actually are, or enforcing hidden exclusions that were never explained when you bought the policy.
- Unreasonable requests for documentation – While it’s common for insurers to ask for proof of damage, unreasonable or repeated requests for additional documentation can be a sign of bad faith. The insurer may be stalling or looking for reasons to deny your claim.
- Failing to investigate your claim thoroughly – Insurance companies are required to conduct a thorough investigation of your claim to assess the damage accurately. If your insurer makes a quick decision without properly reviewing the facts, sends an unqualified adjuster, or dismisses important evidence, this is another sign of bad faith.
Consult an Insurance Law Attorney with Questions
Proving bad faith can prove challenging, and it requires a thorough understanding of insurance law, evidence gathering, and legal procedures. Our team at Kandell, Kandell & Petrie Law Firm can assess your case, advise you on the best course of action, and represent you in negotiations or court proceedings. Contact our team today to speak to one of our claims advisors in Miami to discuss your needs and get started on the road to receiving the financial relief you deserve for your insurance claim in Florida.
