Talat v. Aetna: No Bad Faith Claim Arising from Fire Damage When Insurance Company Pays Appraisal Award Within 60 Day Cure Period

The heat, drought and tropical lightning strikes that cause fires in Miami and South Florida can do significant damage to your home or business.  Fire claims can be challenging because insurance companies frequently allege that the policyholder caused the fire or lied about the property that was damaged.  The prospect of being accused of a criminal offense like insurance fraud or arson often gives an insured pause about whether to move forward with an insurance claim for losses suffered in a fire.  Property damage suffered in a fire may include water damage, smoke damage, damage to personal property, structural damage and other forms of fire-related damage. 

Although these types of allegations may seem intimidating, policyholders have the legal right to pursue the protection against loss afforded by their insurance policy.  When you are faced with bogus criminal charges or other intimidating or abusive tactics by an insurance carrier, you should seek legal counsel from an experienced Miami insurance claim lawyer.    When an insurance company uses tactics like pursuing false allegations of arson or fraud, you might have a legal right to obtain punitive damages and other non-contractual damages in an insurance bad faith lawsuit.  However, legal representation is important so that you understand the limits and restrictions imposed on such actions.

The case of Talat Enterprises, Inc. v. Aetna Cas. and Sur. Co., 753 So.2d 1278 (Fla. 2000), which involved a fire claim brought by a business owner, provides an example of the potential minefield that must be navigated in an insurance bad faith claim arising out of a coverage dispute involving fire damage.  The insured suffered damage from a fire in his restaurant.  The insurance carrier provided an initial check, but the insured provided documentation of further losses that included business income and personal property.  The policyholder received an appraisal award that was fully satisfied by Aetna.  The policyholder provided notice to the insurance company of his intent to file a bad faith action.  The insured waited until expiration of the mandatory sixty day cure period then filed a bad faith lawsuit. 

The insurance company responded by relying on section 624.155(2)(d) of the Florida Statutes that provides in pertinent part: “No action shall lie if, within 60 days after filing notice, the damages are paid or the circumstances giving rise to the violation are corrected.”  Because Aetna had paid the appraisal award (i.e. damages under the contract) prior to expiration of the cure period, it contended that it could not be subject to a bad faith claim.  The policyholder claimed that the insurance company also needed to pay non-contractual damages because of its failure to exercise good faith in settling the claim. The appellate court upheld the trial court’s ruling that paying the appraisal award (i.e. contract damages under the policy) insulated it from a bad faith lawsuit. 

You can reach Miami Fire Insurance Claims Lawyer J.P. Gonzalez-Sirgo by dialing his direct number at (786) 272-5841, calling the main office at (305) 461-1095, or Toll Free at 1 (866) 71-CLAIM or email Attorney Gonzalez-Sirgo directly at [email protected].

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