Bad Faith Insurance Lawyers in Florida

Insurance law can be complex, especially when insurers fail to fulfill their obligations, leading to what is known as “bad faith.” When an insurance company acts unfairly by refusing to pay claims or delaying settlement without justification, it can harm policyholders. Understanding when bad faith occurs and knowing the legal steps to take is crucial for anyone dealing with an insurance dispute. Legal professionals specializing in bad faith insurance claims can help protect your rights and ensure you receive the compensation you’re entitled to.

Bad faith occurs when an insurance company fails to act fairly and honestly in handling a claim. Essentially, the insurer is not upholding its obligations to its policyholder, either by delaying claims or refusing to pay what is owed, despite clear evidence that the claim should be honored.

In Florida, a jury ultimately determines whether bad faith occurred, guided by a law that requires insurance companies to attempt to settle claims in good faith, paying reasonable amounts when warranted. The law defines bad faith as a failure to settle a claim when the insurance company could have and should have, considering all surrounding circumstances. If you are unsure about your rights or next steps, it can be helpful to consult an attorney for insurance issues.

Some common examples of bad faith by insurers include:

• Refusing to Pay Fair Settlements: Insurers may refuse to settle a claim when they should have, given the evidence presented.
• Delaying Claims: Insurers may unnecessarily delay the processing or settlement of claims, causing harm to policyholders.

Underpayment or Lowball Offers: Offering less than the policy limits or failing to settle promptly when they could reasonably do so is also considered bad faith.

Bad faith can occur in both first-party and third-party situations.

• First-Party Bad Faith: This involves suing your own insurance company. A prime example is in uninsured motorist (UM) claims, where your own insurance company fails to provide compensation within the policy limits. Florida law permits policyholders to sue their own insurer for bad faith if the insurer does not pay the claim within a reasonable time frame, and they can even recover more than the policy limits in some cases.
• Third-Party Bad Faith: This occurs when a policyholder is seeking compensation from the at-fault driver’s insurance company. If the insurer fails to settle the claim when it should, and a jury awards an amount exceeding the policy limit, a bad faith lawsuit can be filed.

In both cases, if an insurer refuses to pay a claim they could have settled fairly, policyholders may be able to sue for damages beyond the policy limits.

Civil Remedies Notice (CRN) – A Crucial Step in First-Party Claims

In Florida, before a lawsuit for bad faith can be filed in first-party cases (like uninsured motorist claims), a Civil Remedies Notice (CRN) must be submitted. This is a formal written notice that notifies the insurer of their failure to settle the claim in good faith. The insurer has 60 days to either cure the violation (typically by paying the policy limits) or face the consequences of a bad faith lawsuit.

If the insurer does not settle within that period, and if the case goes to trial with a verdict above the policy limits, the insurer may be liable for bad faith and can be forced to pay the excess amount awarded in court.

Case Story 1: Uninsured Motorist Claim Leading to Excess Payment

Our client, involved in a car accident, had an uninsured motorist (UM) policy that provided $10,000 worth of coverage. The driver at fault in the accident had a $25,000 bodily injury policy. Initially, our client received conservative care, and the insurance companies didn’t offer to pay the policy limits. A CRN was filed, and after the expiration of the 60 day period, the UM insurer still refused to pay the limit.

As time passed, our client’s injuries worsened, eventually requiring back surgery. At this point, the UM carrier offered to pay the $10,000.00, but we refused the offer and argued that the company had acted in bad faith by failing to pay the claim earlier.

The insurance company eventually paid $625,000, far beyond the $10,000 UM policy limit. This case highlights how, when an insurer fails to settle in a timely manner despite clear evidence of the policyholder’s increasing damages, they may be forced to pay a much higher amount than initially contracted.

Case Story 2: Refusal to Settle Resulting in Excess Judgment

In another case, our client was involved in a severe car accident where the at-fault driver had a $25,000 insurance policy. The damages sustained by our client exceeded the policy limits, and medical bills piled up as our client underwent surgery. Despite being given multiple chances to settle for the policy limits, the insurer refused to pay the amount owed.

After filing a demand and submitting a CRN, the insurer again failed to pay the policy limits within the required time frame. We moved forward with litigation, and ultimately, a jury awarded our client a $600,000 judgment, far exceeding the policy limit. The insurance company was found to have acted in bad faith by failing to settle, and they were required to cover the entire $600,000 verdict, beyond their policy limits.

Once a bad faith lawsuit is initiated, it can be a lengthy and costly process. Insurance companies often try to avoid paying more than the policy limit by defending against bad faith claims. These cases may involve extensive litigation, including depositions, discovery, and expert witnesses. Sometimes, the insurance company may settle before trial to avoid further penalties, including attorney fees and interest.

In some cases, insurance companies will recognize their mistake and offer more than the policy limit to settle before going to trial. For example, an insurer may pay significantly above the policy limit to avoid a bad faith judgment, as seen in some cases where clients received settlements many times their coverage amount.

How Much Can You Sue For?

If a bad faith lawsuit is successful, the amount recoverable can be much higher than the original policy limit. However, securing these damages is rare and requires a significant excess judgment. For instance, if an insurer refuses to settle a claim for $100,000, and a jury awards $600,000, the policyholder may be able to recover the entire $600,000 from the insurance company.

While this is uncommon, it underscores the importance of ensuring insurers honor their obligations to avoid substantial penalties for failing to settle appropriately.

Challenges in Bad Faith Cases

Bad faith claims are often challenging because insurance companies vigorously defend against such accusations. They may argue that their refusal to settle was based on legitimate concerns or that they acted in good faith. Overcoming these defenses requires the expertise of an experienced bad faith lawyer, who can gather evidence, hire experts, and present a compelling case to a jury.

Additionally, bad faith cases can be time-consuming, with some cases taking up to 10 years to resolve. This is why working with an experienced attorney who understands the intricacies of insurance law is essential.

A bad faith insurance lawyer specializes in holding insurers accountable for unfair claims practices. These lawyers understand the complex laws surrounding both first-party and third-party bad faith claims and can guide clients through every step of the legal process. Their goal is to secure compensation that exceeds policy limits when insurers fail to settle claims appropriately.

Bad faith lawyers also deal with challenges such as:

• Prolonged legal battles: Some cases can drag on for years, especially when insurance companies resist paying out settlements.
• Federal vs. State Court: Many bad faith cases end up in federal court due to the diversity of jurisdiction, which can add complexity to the process.

In addition, they are well-versed in using tools like proposals for settlement to leverage better outcomes in settlement negotiations.

Misconceptions About Bad Faith Claims

One of the most common misconceptions is that any refusal by an insurance company to pay a claim is automatically considered bad faith. However, an insurer is not obligated to accept every demand made by the policyholder. The law allows them to dispute claims based on evidence and the circumstances of the case. Bad faith only occurs when an insurer acts in its own financial interest and ignores the policyholder’s interests.

Additionally, while an excess verdict above policy limits may suggest bad faith, the jury may still find that the insurer acted in good faith, despite the unfavorable outcome.

Bad faith insurance claims are complex, but with the right legal support, policyholders can hold insurers accountable for their unfair practices. Whether it’s a first-party claim against your own insurer or a third-party claim against the at-fault party’s insurance, a bad faith lawyer near you can guide you through the process and help you seek justice and fair compensation. If you believe your insurer has acted in bad faith, contacting an experienced bad faith car insurance attorney in Florida is crucial to understanding your rights and determining the best course of action. Contact Abrahamson & Uiterwyk today for a consultation and let us help you protect your interests.

The highly-experienced Florida personal injury law firm of Abrahamson & Uiterwyk also provides:

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