Court Upholds Policyholder's Right to Pursue Bad Faith Liability against Citizens Property Insurance Corporation

A recent decision by Florida’s First District Court of Appeals marks a major victory for homeowners with insurance coverage through Citizens Property Insurance Corporation who suffer property damage.  The decision overturned a trial court ruling that held that Citizens was not subject to liability for bad faith claims because the carrier is a quasi-governmental entity.

Florida insurance bad faith attorney J.P. Gonzalez-Sirgo commented on the ruling, “This decision protects policyholders from unreasonable, unfair and unethical practices by Citizens.  The court’s ruling will provide pressure on Citizens to deal with its policyholders fairly and in good faith to avoid liability for punitive damage or bad faith damages judgments.”

Citizens is the largest property insurance carrier in Florida so the decision provides broad protection to many homeowners throughout the state.  The court found that policyholders have the legal right to pursue bad faith liability claims against the property insurance carrier, so policyholders have recourse if they are exposed to wrongful conduct by Citizens in denying or lowballing their claim.

The court based its decision on Florida Statute 627.351(6)(s)2, which imposes a duty on Citizens to process claims made by its policyholders “carefully, timely, diligently and in good faith.”  The objective of the Florida legislature in enacting this provision was to protect policyholders and reign in potential unfair and sharp practices by the state’s largest provider of property insurance.

The insurer claimed that it was exempt from liability for bad faith claims because of its status as a quasi-public entity.  Citizens contended that granting policyholders with the authority to bring bad faith liability claims would harm taxpayers by increasing expenditures on punitive damages and other non-contract damages as well as litigation costs in defending bad faith claims. 

The court recognized the inherent fallacy in this position.  The argument asserted by Citizens is based on the assumption that policyholders will bring frivolous bad faith claims if they have the ability to be awarded damages exceeding the legitimate value of their loss.  The court’s decision correctly recognizes that these concerns are unwarranted provided Citizen’s acts in good faith when dealing with its policyholders and processing claims. 

The decision of the court is based on sound public policy because policyholders are protected from sharp insurance industry practices while Citizens and Florida residents avoid unnecessary litigation related expenditures as long as Citizen’s adjusts claims in good faith.  Because bad faith actions provide an insured with the ability to seek more extensive damages that may far exceed the value of a claim, bad faith liability is a critical remedy to prevent insurance companies from knowingly and intentionally disregarding its duties to policyholders who have faithfully paid their premiums.

Florida Bad Faith Insurance Attorney J.P. Gonzalez-Sirgo is committed to seeking the full value of an insured’s loss for those who suffer property damage.  If you have suffered damage to your home but your insurance company is not living up to its contractual agreement, we are here to help!  We can negotiate with the insurance company to obtain the full value of your claim and/or pursue an insurance bad faith lawsuit if appropriate.   Florida property damage insurance claim lawyer J.P. Gonzalez-Sirgo handles cases against Citizen Property Insurance Corporation and other carriers in Miami and throughout Florida. The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations. No Recovery, No Lawyer Fees. Call 305-461-1095 or Toll Free 1-866-71-CLAIM.

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