So, you believe your insurance company has acted in bad faith. What’s the next step? Is there any recourse for you? As we have previously discussed, Florida recognizes causes of action for insurance company bad faith.
But before you race to the courthouse and file suit for bad faith, there are some steps you have to take. First, the insured must recover contractual damages under a separate action or through appraisal. Usually, this is done by filing a breach of contract claim, where damages are awarded to the insured.
Secondly, the insurance company must receive a sixty day written notice of the
violations on the form published by Florida’s CFO, which could be found here. This civil remedy notice (CRN) is the document that puts your insurance company on notice of the alleged violation and allows them to fix the issue before having to go to court. After serving the insurance company with the CRN, they have sixty days to fix the alleged violation. An insurance company can cure the violation by paying damages or correcting the reason for the alleged violation. If the insurance company pays for the damage during the “cure” period, you can no
longer file suit for bad faith. But what if you prepare and serve your insurance company with a CRN and the insurance company ignores you? If an insurance company does not respond within the sixty days, that will create a presumption of bad faith.
What if you win the case against your insurance company? Under the Bad Faith Statute, attorney’s fees and costs, interest, and additional damages caused by the insurance company’s actions can all be awarded as damages. These damages could include monies beyond the policy limits. Florida also allows for the award of punitive damages.
How do you know if your insurance company is acting in bad faith? In Bay v. United Services Auto. Ass’n, the insured had a cause of action against its insurance because their insurance allegedly undervalued damage to the insured’s home and denied coverage under the homeowner’s policy. 305 So. 3d 294 (Fla. 4th DCA 2020). Additionally, in Demase v. State Farm Florida Ins. Co., the court held the insureds had a cause of action for bad faith against their insurance. In this case, the insured’s home had sustained suspected sinkhole damage. 239 So.
3d 218 (Fla. 5th DCA 2018). Their insurance hired an inspector who recommended repairs. The insured’s completed the repairs; however, these repairs resulted in further damage to their home. Two inspectors recommended additional repairs, but then the insurance company hired another inspector and denied any sinkhole activity affecting the property. As a response, the insured’s filed a bad faith claim for failing to promptly and properly investigate the claim, adjust the loss, and act with due diligence and good faith to resolve and pay the claim.
The latter are just two examples of bad faith conduct. Each individual claim is different and should be evaluated on its own merits. If you think your insurance company has acted in bad faith, contact the attorneys at Alvarez Law Group for a free claim review.
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