You pay your insurance premiums on time, expecting that if the worst happens, your insurance company will be there for you. Unfortunately, insurers often prioritize profits over policyholders. When...
You pay your insurance premiums on time, expecting that if the worst happens, your insurance company will be there for you. Unfortunately, insurers often prioritize profits over policyholders. When an insurance company unreasonably denies or delays a valid claim, they may be acting in 'bad faith.' Historically, Florida allowed policyholders to sue for this. However, recent tort reform (HB 837) has made bringing these claims significantly harder.
What Is Insurance Bad Faith?
Bad faith occurs when an insurer fails to settle a claim when it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for their interests. This can happen in first-party claims (your own insurer) or third-party claims (the at-fault driver's insurer failing to protect them from a lawsuit).
How HB 837 Changed Bad Faith Laws
The new law creates a 'safe harbor' for insurance companies. It states that there can be no common law bad faith action if the insurer tenders the lesser of the policy limits or the amount demanded by the claimant within 90 days of receiving actual notice of the claim. This gives insurers a 'get out of jail free' card to delay payment for three months without fear of a bad faith lawsuit.
Duty to Cooperate
The new law also codifies that the insured (you) and your representative have a duty to act in good faith in furnishing information and attempting to settle the claim. If a court finds that you did not cooperate sufficiently, your bad faith claim against the insurer could be reduced or dismissed.
Why Bad Faith Matters
Bad faith laws are the only thing that keeps insurance companies honest. Without the threat of extra penalties, insurers would have no reason to pay claims promptly or fairly. Despite the new restrictions, bad faith claims are still possible and necessary in egregious cases.
Fighting Back
While the bar has been raised, Emas Law Group is still committed to holding insurers accountable. We know how to document your claim perfectly, provide all necessary information, and trigger the insurer's duties so that if they fail to pay, we can still pursue a bad faith action effectively.
Contact Emas Law Group Today
Insurance companies may have new protections, but they are not above the law. If your claim has been wrongfully denied or delayed, you need a lawyer who understands the new bad faith landscape. Contact us to review your policy and your claim denial.
Frequently Asked Questions
What is the 90-day safe harbor?
It is a period during which an insurance company can pay the policy limits to avoid a bad faith lawsuit, even if they initially mishandled the claim.
Can I sue for emotional distress in a bad faith claim?
Generally, bad faith damages are economic (the amount of the judgment exceeding policy limits), but in some cases, other damages may be recoverable.
Do I need a separate lawyer for a bad faith claim?
Often, yes. A bad faith claim is a separate lawsuit from the original injury case. We handle both or partner with specialists when needed.