Florida law recognizes concepts of insurance “bad faith.”  This means that an insurance company has a legal obligation to deal fairly and honestly towards others.  At present, there is no such thing as “counter-bad faith” or bad faith of a claimant.  There are two forms of insurance bad faith in Florida--first party and third party.  First party bad faith is when an insurance company acts in bad faith toward its own insured.  Common law first party bad faith has been replaced by section 624.155, Florida Statutes.  To preserve a first party bad faith claim, an insured is required to file a civil remedy notice of insurer violation (also known as a “civil remedy notice”) with the Florida Office of Insurance Regulation (FLOIR).  Failure to file the notice can be fatal to your bad faith claim.  Further, there is a 60 day safe harbor given to insurance companies after the filing of a civil remedy notice.  During that time frame, if the insurance company corrects the problem (usually by paying on the claim), then the “bad faith” is cured and you cannot sue for bad faith.

 

Examples of "Bad Faith"

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Section 624.155, Florida Statutes states:

1. Not attempting in good faith to settle claims when, under all the circumstances, it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for her or his interests;

2. Making claims payments to insureds or beneficiaries not accompanied by a statement setting forth the coverage under which payments are being made; or

3. Except as to liability coverages, failing to promptly settle claims, when the obligation to settle a claim has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage.

 

On the other hand, third party bad faith is when the insurance company acts in bad faith toward a third party who is not in privity of contract with the insurance company.  These cases are the product of common law, or a history of judicial cases that have been decided over time.  In third party bad faith, there is no civil remedy notice and no 60 day safe harbor to cure problems that may exist.  First party bad faith actions are generally preferable to third party bad faith actions.  There are a number of judicial opinions on this subject to which the question of whether an insurance company has committed bad faith is a complex legal analysis.

 

If you believe that you an insurance company has acted in bad faith with regard to your insurance claim, please contact a Florida bad faith attorney for an evaluation of the merits of your case.  Please be aware that depending on the stage of your claim (i.e. litigation, post-judgment, etc.), clear answers may or may not exist as to whether bad faith exists.  Typically, insurance bad faith cases arise when a third party makes a claim against the liability policy of someone who caused an accident.  After the insurance company fails to accept an offer within policy limits when the claim could have and should have settled, bad faith may exist if the judgment obtained by the injured third party exceeds the policy limits.  In such a case, elements of third party and first party bad faith may exist and the person who caused the accident may assign their right to sue for first party bad faith to the injured third party.

 

Bad Faith in Medical Malpractice

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Special rules apply to insurance bad faith in medical malpractice cases.  A separate statute covers bad faith in medical malpractice cases.  While a number of things can impact the “safe harbor” window in a medical malpractice bad faith case, a general assumption is that the “safe harbor” period for medical malpractice cases is 270 days or 9 months.