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What constitutes a bad faith claim?

As a Florida homeowner, you should be able to rely on your insurance company to provide crucial coverage when your home sustains costly damage. Sometimes, however, insurance companies act in bad faith, denying or delaying settlement for valid claims. When this occurs, you may have grounds for a civil action. Here is an overview of some of the building blocks for an insurance bad faith claim.

According to Florida law, you are permitted to bring a civil action against your insurer if the agency acts in bad faith in any of the following ways:

  • Failing to settle claims that it might otherwise have settled were it acting honestly, in good faith and in your interests as the insured party
  • Delaying the settlement of claims made under one section of your insurance policy with the intention to alter settlements made under another section of your insurance policy
  • Failing to provide a statement specifying the relevant section of your insurance coverage when claims payments are made

If you elect to pursue a bad faith claim, you need to provide 60 days’ notice, in writing, of the violation to both your insurance company and the Department of Financial Services. If the insurance company responds by paying the desired damages within this time period, you may no longer be able to pursue civil action against the company.

The Department of Financial Services will review the notice and identify any inadequacies within 20 days of its submission. If the notice is deemed inadequate, it will be returned to you for correction, and the 60-day period will begin anew.

In your notice, you should specify the name of the persons or agencies involved in the case as well as the events surrounding the violation. You also must identify which statute the insurance company violated and indicate any policy language relevant to your claim of policy violation. Finally, you need to include a statement that you are providing this notice with the intention to seek civil remedy for the damages you have suffered as a result of your insurance company’s actions.

This information is provided for educational purposes and is not intended as legal advice.

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