In a perfect world, when you file a claim with your insurance company after a car accident, hurricane, or other event, they would jump right on your request and pay out all the money you need in a timely manner. But this is far from a perfect world, and insurance companies are often more than frustrating to work with.
But even insurance companies are lawfully expected to uphold certain behaviors and expectations. When they don’t, they are liable to face something called a bad faith claim.
Understanding Bad Faith Insurance Claims
It’s no secret that insurance companies can be incredibly difficult to work with, especially when you’re seeking a large amount of compensation to address the damage and injuries you’ve suffered. Their goal is to get away with giving up as little money to their customers as they can because that’s how they hold onto as much money as possible for themselves. This has long been an ongoing problem with casualty insurance of all kinds.
When an insurer wrongly denies coverage for a claim or fails to settle a claim against its insured, they may be acting in bad faith. Their bad faith behavior could be for any number of reasons, such as an attempt to save money, poor work performance, or even negligence of laws and operations. While not every denied insurance claim can be considered bad faith, Florida statutes do provide that any person may bring a civil action against an insurer when that person has been wrongfully damaged by certain acts of the insurer.
Florida law requires insurance companies to act in good faith and engage in fair deals with their customers. These laws make it so that insurance providers refrain from acting solely on the basis of their own interests when it comes to settlements. So when your insurance provider does not follow these standards accordingly, you may be eligible to begin the process of filing a bad faith claim.
There are two types of bad faith claims. A first-party bad faith claim arises when the insurance company unreasonably refuses to either pay a claim or investigate the claim properly. A third-party bad faith claim occurs when the insurance company fails to defend, indemnify, or settle a claim for a different party that is within their policy limits; for example, when the insured (you) buys insurance from the company to protect against claims from another (the third party), and they fail to do so sufficiently.
Reasons to File a Bad Faith Insurance Claim
There are many types of scenarios that may constitute the filing of a bad faith claim against your insurance company. For example, they may have:
- Denied the claim without giving a reason. Insurance companies should always state the reason for their claim denial. The same is true if you request specific documentation supporting their decision—they cannot reasonably deny this request.
- Failed to conduct a prompt or complete investigation of the claim. For example, if a homeowners’ insurance company visits their home after a fire, concludes a fire did occur, but fails to completely investigate the cause of the fire or the extent of the damage, and denies the claim.
- Offered less money than the claim is worth. When insurance companies make these kinds of “lowball” offers, they are often acting in bad faith. For example, if you have $5,000 in medical injury insurance, but your insurance company offers to only pay $1,000 of your medical bills after an accident.
- Delayed decisions on requests for approval of medical treatment. Time is of the essence when it comes to seeking medical treatment. If your doctor has prescribed care that is reasonable and necessary, your insurance company has a duty to act on that request within a reasonable amount of time.
- Misrepresented the law or policy language. As part of their duty of good faith, insurance companies must be truthful about the statements they make to you about the law and your policy.
- Delayed payment on a valid claim. Most often, claim payments must be made within three months of approval. If the insurance company has no reasonable explanation for delaying payment beyond this timeline, they could have a bad faith claim on their hands.
The Process of Filing a Bad Faith Insurance Claim
If you believe your insurance company has acted unjustly or irresponsibly in response to your claim, the first step is to educate yourself on what exactly your insurance company should be doing for you. This includes making sure you thoroughly read through your policy to see what kind of coverage you have, and what the obligations of your insurer are. In general, your insurer is obligated to recognize your claim, investigate it thoroughly and promptly, respond to your communications in a timely manner, not slow down the progression of the claim unjustly, and offer actual reasons for denial or delays.
If your claim has been unreasonably denied or delayed, you may qualify to file a bad faith claim against your insurer in court. But even before you can do that, the insurance company must legally be given 60 days to resolve the alleged violation. To begin this process, the policyholder must file a notice with both their insurance company as well as the Department of Financial Services. If the insurance company responds to this filing by satisfactorily settling your claim within 60 days, you will no longer have a bad faith claim. But if they still fail to remedy the situation, the next step is to file a complaint in court.
This is when you will need the assistance and guidance of an experienced casualty insurance lawyer. The Whisler Law Firm works with clients to help them interpret their insurance policies, build a case that shows undue care and behavior on the part of the insurance provider, and earn them the compensation they deserve. We’re not afraid of taking these big companies to court, because we’ve built a reputation of winning. With that reputation comes the increased likelihood that your insurance provider will finally settle your claim reasonably.
If you’re unsure whether or not you have a viable bad faith insurance claim to file, The Whisler Law Firm wants to hear your story and look through your insurance policy with you. And we offer entirely free initial consultations to do just that. Call our office at 833-529-5677 or fill out our online form to schedule a consultation with our team and get started down the road to the compensation you deserve.