An insurance company may be acting in bad faith if it refuses to settle a claim when it should do so. However, merely denying a claim does not constitute bad faith.
What is insurance bad faith in Florida?
Types of bad faith claims
There are two types of bad faith claims in Florida. A first-party bad faith claim is when an insurance company refuses to investigate or pay a claim involving a policyholder when it could or should do so. A third-party bad faith claim happens when an insurance company has a contractual obligation to defend, settle or indemnify a claim or investigate a claim for a third party and refuses to do so.
Florida bad faith law
Florida statute says that a person can make a bad faith claim if an insurance company damages them by refusing to settle a claim when it could and should have done so. If you believe your insurance company has acted in bad faith, you can file a lawsuit; however, you must give the insurance company 60 days to settle the claim in good faith first.
You can start the process by filing a notice with the insurance company and the Department of Financial Services. If the insurance company offers you a good faith settlement within 60 days, then you no longer have a claim. If they do not make a good faith attempt, then you can file your claim in court.
The ability to file a bad faith claim protects consumers against insurance companies placing their self-interest ahead of their contractual obligations to their policyholders.
