Denial of Insurance Claims or INSURANCE BAD FAITH
Florida‟s “bad faith” law allows an insured person or someone who has been injured by an insured person to recover damages from an insurer for failing to settle a claim in good faith when the insurer could and should have done so. Florida has had bad faith remedies in place through the common law and statute for many years, targeted at protecting insurance consumers from unfair practices on the part of insurers. Some experts argue that Florida’s bad faith law is an effective check on insurance companies, which generally have a considerable advantage over insured’s in terms of bargaining power. However, others argue that the current bad faith system has gone beyond leveling the playing field and has created incentives for insured’s or injured third parties to use strategies to allege that an insurer acted in bad faith, leaving insurers to navigate unfair, yet legal tactics to convert policy limits into unlimited insurance through the cause of action. The purpose of this interim report is to review current practices based on the experiences of legal practitioners, insurance companies, and others with expertise in insurance bad faith, as well as case law, statutes, legal scholarship, and data associated with bad faith in Florida and other jurisdictions, in order to give legislators a basis for evaluating what potential changes, if any, are needed to Florida law.
Insurance Requirements and Insurer Obligations
Insurance is a contract under which, for stipulated consideration, one party undertakes to compensate the other for loss on a specified subject from specified perils. The insurance contract is commonly referred to as a policy, and the consideration is called a premium. The party seeking to make the compensation is called the insurer, and the party paying the premium is the insured. Two major categories of insurance that are often relevant to bad faith are property insurance and liability insurance. Property insurance protects individuals from the loss of or damage to property and, also in some instances, personal liability pertaining to the property. One of the common lines of insurance in this category is homeowner’s insurance. Automobile liability insurance covers suits against the insured for such damages as injury or death to another driver or passenger, property damage, and the like. It is insurance for those damages for which the driver can be held liable. In Florida, every owner or operator of an automobile is required to maintain liability insurance to cover a minimum of $10,000 in coverage for damage to another’s property in a crash. Additionally, every owner or registrant of an automobile is required to maintain personal injury protection, which covers medical expenses related to a car accident regardless of fault up to $10,000 per person and $20,000 per incident. These are the only two types of automobile insurance required by Florida law.
For more information please contact our office now to set up an appointment with attorney Daniel Lenghea to determine the best cause of action.