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Florida Bad Faith Auto Insurance Decided in Crash Victim’s Favor

Florida Supreme Court justices recently weighed a Florida bad faith auto insurance claim in the case of a deadly crash 12 years ago. In a divided ruling, the court affirmed the jury’s decision, which concluded an auto insurance company acted in “bad faith” the way it handled a wrongful death claim against its insured. In a 4-3 ruling, justices agreed with jurors that the auto insurer improperly exposed the policyholder to an $8.5 million verdict issued reached in a fatal car accident claim. 

How Does Florida Define Bad Faith Auto Insurance? 

Florida’s bad faith insurance law is spelled out in F.S. 624.155, which creates a clear, unambiguous means by which any person (including third parties) injured as a result of an insurer’s bad faith dealings has grounds to file a bad faith claim. Third-party bad faith claims are those that can be established by showing violation of the Florida Unfair Insurance Trade Practices Act. Some examples of bad faith insurance as explained in provisions of that law include:

  • Materially misrepresenting to an insured or any interested person the proceeds payable under the contract or policy in order to impact the effecting settlement of such claims.
  • Failing to acknowledge and act promptly to communicate on issues pertaining to claims.
  • Denying claims without conducting a reasonable investigation based on the information available.
  • Failing to affirm or deny full or partial coverage, and if a denial or partial coverage, give a reasonable explanation of why.
  • Failing to promptly notify the insured of any additional information necessary to process the claim.

Florida recognizes claims for third-party common law bad faith (as noted in the 1938 Florida Supreme Court case of Auto Mut. Indem. Co. v. Shaw). Such claims stem directly from the insured’s claim (as an insurer owes no duty of good faith directly to an injured third-party).

In other words, if you are are injured in a Palm Beach car accident by a negligent driver, that driver’s auto insurer owes a duty of care to defend its customer from legal action. If the insurer refuses, you can still proceed with your case against the insured (who most likely lacks the personal assets necessary to cover a verdict rendered in a serious crash case). If the crash victim wins, they may waive the verdict in exchange for the defendant signing over the rights to his or her Florida bad faith auto insurance claim against their own insurer.

Florida Supreme Court Affirms Florida Bad Faith Auto Insurance Verdict in Palm Beach

Writing for the majority, Justice Peggy A. Quince stressed it is an auto insurer’s duty to represent customers against lawsuits alleging behind-the-wheel negligence. Furthermore, Quince wrote, an auto insurer isn’t absolved of liability merely because it advised the insured of opportunities to settle, the probable outcome of a lawsuit and the possibility of excess judgment. Instead, to avoid a finding of Florida bad faith auto insurance, the insurer has to act swiftly, meticulously and “as if it were in the insured’s shoes,” and work on behalf of the insured to avoid that excess judgment. The court rejected defendant insurer’s argument that the alleged failure to turn over a statement of assets by its customer, a man who negligently ran his vehicle into a motorcycle in 2006, killing the rider, somehow let the insurer off the hook. That’s because the focus in any Florida bad faith auto insurance case isn’t based on the actions of the insured, but rather on the insurer – and whether it fulfilled its obligations.

The majority also pointed out that the auto insurer’s claims adjuster, who had been cited on two occasions for organizational issues, failed to make sure information was timely passed between the estate of decedent motorcyclist and the insurer. Although the negligent driver’s insurer did try to settle the case for the policy limit of $100,000, that offer was rejected, the case went to trial and the jury awarded $8.5 million. That verdict was overturned by a state appellate court, but reinstated by the Florida Supreme Court, which found the appeals court justices improperly applied legal precedents in its decisions.

If you suspect the insurer isn’t treating you fairly or if the insurer responsible for representing the defendant isn’t doing so or refusing to pay, our Palm Beach car accident attorneys can help.

Call Freeman Injury Law — 1-800-561-7777 for a free appointment to discuss your rights. Now serving Orlando, West Palm Beach, Port St. Lucie and Fort Lauderdale.

Additional Resources:

Florida Supreme Court justices deal blow to insurer in ‘bad faith’ dispute, Sept. 20, 2018, By Jim Saunders, The News Service of Florida

More Blog Entries:

Spinal Cord Injury Attorney Explains Possible Crash Compensation Options, Oct. 30, 2018, Palm Beach Florida Bad Faith Auto Insurance Attorney Blog

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