Necessary Prerequisites to Pursuing an Insurance Bad Faith Claim in Florida

J.P. Gonzalez-Sirgo
Founder of J.P. Gonzalez-Sirgo, P.A.

Every state provides legal remedies for insurance policyholders that are exposed to bad faith tactics by their insurance company.  The prevalence of such remedies is a testament to the propensity of insurance companies to delay, deny and lowball claims submitted by policyholders.  Unfortunately, this remedy can be more difficult to employ in Florida than in other states because the Florida Supreme Court has ruled that there is no longer a common law first party bad faith cause of action available to Florida policyholders.  Rather, an insured in Florida must rely entirely on the insurance bad faith statute (Section 624.155) enacted by the Florida legislature.  Below is an overview of prerequisites to pursuing a bad faith claim against insurance companies in Florida under the civil remedy statute.

First Party vs. Third Party Claims

Because section 624.155 specifically deals with the failure of insurance companies to treat and act fairly toward policyholders, the statutory bad faith remedy is only applicable to first party insurance claims according to the Florida Supreme Court.  

Section 624.155(a) and (b) articulates the types of conduct that may provide a basis for a civil action to be brought under the statute against an insurance company.  The provisions set forth criteria for evaluating the actions of an insurance carrier to analyze whether the insured has acted honestly and fairly toward its policyholder with due regard for the policyholder’s interest.  This language focusing on the treatment of policyholders by an insured has been used by the Florida Supreme Court in support of the proposition that this civil remedy is available in first party insurance disputes.

Finding on Liability and Amount of Damages

It is clearly established under Florida law that a policyholder cannot pursue a claim for extra-contractual bad faith damages under Section 624.155 until there has been a determination of coverage and calculation of damages.  If a statutory bad faith claim is brought prior or simultaneous to such a determination, the bad faith cause of action will be considered premature.

Final Determination

A verdict that establishes a breach of contract by the insurance carrier and that determines the amount of the policyholder’s loss is not necessarily sufficient to pursue a bad faith claim.  The policyholder must wait until all appeals have been exhausted before proceeding with a bad faith claim.  This means that the insurance company has exhausted its appeals or the time to bring any further appeals has expired.

Sixty Day Notice

Perfection of a claim under Section 624.155 requires providing notice to the Florida Department of Financial Services (FDFS) as specified in the statute.  The notice must be provided a minimum of sixty days prior to filing a bad faith lawsuit.  The notice must also be served on the insurance company.  The insurer has a sixty day window to remedy the violation.

This blog should make it abundantly clear that the process of pursuing a bad faith claim against a policyholder’s insurance company can be a complex process in Florida.  My law firm represents policyholders in claims disputes in Miami and throughout Florida, so we can guide you through the process.  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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