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). Continue reading →