Insurers owe a fiduciary duty to their policyholders and are required to “…refrain from acting solely on the basis of their own interest in settlement.” State Farm Mut. Auto Ins. Co. v. Laforet, 658 So. 2d 55 (1995). Pursuant to Florida’s Unfair Trade Practices Act, any of the following can constitute bad faith:
- Attempting to settle claims on the basis of an application that had been altered without notice to the insured
- A material misrepresentation made to an insured with the intent of effecting settlement under such contract on less favorable terms than those provided in the policy
- Committing any of the following as a general business practice:
- Failing to properly investigate claims
- Misrepresenting pertinent facts or insurance policy provisions
- Failing to promptly communicate with insureds
- Denying claims without conducting reasonable investigations
- Failing to affirm or deny full or partial coverage of claims upon the written request of the insured within 30 days after proof-of-loss statements have been completed
- Failing to offer a reasonable explanation in writing to the insured for denial of a claim or for the offer of a compromise settlement
- Failing to promptly notify the insured of additional information necessary for the processing of a claim; or
- Failing to clearly explain the nature of the requested information and the reason why such information is necessary
Under Fla. Stat. 624.155(3)(a)(b), prior to bringing a bad faith claim against an insurance carrier, a Civil Remedy Notice must be filed, stating (1) the statutory provisions violated; (2) the facts and circumstances giving rise to the violation; (3) the name of any individual involved in the violation; and (4) reference to specific policy language that is relevant to the violation, if any. Additionally, an insured must establish contractual liability and obtain a judgment against the insurer for breach.
The insurer is then given sixty (60) after written notice of violations, to “cure” the alleged bad faith violation, by paying for the damage, or otherwise addressing and correcting the conduct giving rise to the violation(S) before any further action can be taken. If the violation(s) are cured within the 60-day period, there is no longer a basis for a bad faith suit. However, if the carrier fails to respond to and cure bad faith the violations within the cure period, it will be presumed that the carrier acted in bad faith, and they will have the burden to show why its failure to respond and a cure was not in bad faith.
Our practice is statewide, and we have offices in Miami, Fort Pierce, Pensacola, Orlando, and Miramar Beach, Florida. Call ILG for sound advice and immediate assistance in your Florida Insurance Disputes.