Proving Institutional Bad Faith Claims: Why You Need an Attorney?

The insurance industry has developed practices for mitigating financial liability for claims, but sometimes insurance companies engage in conduct that constitutes a systematic pattern of unfair claims practices.  Insurance carriers might adopt practices that clearly deviate from generally accepted industry standards for good faith insurance practices.  Many insurance companies focused on their financial bottom line rely on conduct intended to prevent its customers from enjoying the benefit of their bargain under the policy.  Insurance carriers that engage in such practices have evolved, so insurers have become more effective at masking the purpose, effects and cause of these bad faith tactics.  The sophistication of insurance companies in utilizing these unethical strategies makes it important to retain an experienced Miami insurance coverage attorney.

The discovery process is the key to successful lawsuits alleging acts of institutional bad faith.  There are records that must be maintained by an insurance company that can be used to identify and analyze allegations that an insurer is inappropriately suppressing aggregate claim payments.  Extra-contractual damages in an insurance bad faith lawsuit will depend on aggressive use of discovery tools and persuasively presenting that information to a jury.

This approach to litigation of an institutional bad faith claim involves not only proving the strategies involved in underpaying or denying claims but also the manner through which the entire claims department is induced to comply.  An insurance attorney also will routinely use an expert witness with the expertise to contrast the claims practices of your insurance company with customary practices of good faith claims handling.  Insurance companies can be expected to tenaciously fight to prevent aggrieved policyholders from peaking behind the insurance industry’s curtain.

Florida law requires establishing the offending practice caused personal harm to the insured, and the practice is a standard practice for the insurance company.  If your insurance lawyer can prove a general business practice, the jury can award punitive damages.  Florida Statutes Section 624.155 provides in pertinent part:

“No punitive damage shall be awarded under this section unless the acts giving rise to the violation occur with such frequency as to indicate a general business practice, and these acts are:

  1. Willful, wanton and malicious; [or]
  2. In reckless disregard for the right of any insured . . .”

Florida cases reveal that evidence of “other similar claims” is a form of evidence that can be utilized to establish sufficient frequency.  However, there is no bright line rule in Florida regarding how many additional acts constitute sufficient evidence to meet the statutory standard.  The Fourth District Court of Appeals found that a total of four instances was not sufficient to meet the statutory standard for a general business practice.

Other types of evidence used in Florida cases to establish a general business practice include the following:

  • Expert testimony regarding insurer procedures and practices
  • Internal company documents revealing the inappropriate claim practices as standards for investigation of claims
  • Testimony of company executives or employees that the claims practices were in conformity with general business practices
  • Documents evidencing bonus policies linked to minimizing or avoiding claims payouts
  • Testimony or documents depict practices that will ultimately lead to statutory violations

As an experienced Miami insurance claims attorney and former claims adjuster, our law firm recognizes the evidence that must be gathered to build a compelling claim that an insurer has engaged in bad faith general business practices.  If you have questions about Miami-Dade insurance claims, you are welcome to contact my Florida law firm.  My law firm represents policyholders in claims disputes 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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