Can Citizen’s Insurance Be Liable for Acting in Bad Faith?

April 14, 2014

Insurance, Newscasts

The First District Court of Appeal sitting in Tallahassee says “YES.” The Fifth District Court of Appeal sitting in Daytona Beach says “NO.” On March 26th, the Florida Supreme Court agreed to step in and settle the difference of opinion.

Every insurance company in Florida has a duty to act in good faith to try to settle claims brought by their insureds. While this might sound obvious, it is also the law. Section 624.155(1) of the Florida Statutes defines what makes up a “bad faith” claim. That statute recognizes that someone who pays his premiums for insurance should be entitled to fair dealings with their insurance company when a loss occurs, and the statute specifically allows additional damages against insurance companies who engage in tactics designed to benefit the company at the expense of the insured. Specifically, the statute allows a cause of action against “the insurer” for “[n]ot 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.” § 624.155(1)(b) 1.

The question before the Court is, “Does this statutory duty also apply to Citizens since Citizens is a quasi-governmental entity—meaning it can enjoy some aspects of sovereign immunity?” The decision will have far-reaching impacts on how claims are handled. Bad faith is bad practice. Let’s hope the Florida Supreme Court issues an opinion that tells insurance companies of all stripes that unfair dealing and delay tactics are punishable and will not be tolerated.

If you have questions or concerns about the way your insurance company is handling your claims, call us. We never charge a fee or cost to inform you of your rights.

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