Special Challenges in Pursuing Insurance Bad Faith Claims in Florida

When people purchase a home in Florida, they are typically excited and looking forward to the security offered by their investment.  However, the process of protecting and maintaining your home comes with significant responsibilities.  Whether your home is a brand new home in a just completed residential development or an older fixer-upper that needs some TLC, homeowners must respond to severe storms and other hazards that damage their property to ensure the value of their home is not diminished.  There are many types of hazards that can threaten both the value and safety of your home.

Property insurance is important because it permits you to file a claim for damages if your residence is damaged by a fire, flood or sinkhole.  However, the many months and years of paying premiums is only worthwhile if an insurance company treats policyholders fairly in settling claims.  Unfortunately, many policyholders are frustrated when their insurance company denies their claim or disputes the value of the loss so that the homeowners cannot return their property to its pre-loss condition.

The stress and anxiety associated with learning that your insurance company is refusing to pay a claim or unwilling to pay the value of your loss can seem like a horrible nightmare.  However, policyholders do not have to accept unjustified denials of their claim or lowball settlement offers that fall woefully short of making homeowners whole.  While there are remedies for policyholders who have their claim denied without justification, changes in Florida insurance law in recent years has made it more important than ever to retain an experienced Florida insurance coverage attorney.

The Florida Supreme Court ruling in QBE Insurance Corp. v Chalfonte Condominium Apartment Assoc., Inc., Case No. SC09-441 (Fla. May 31, 2012) made the process of pursuing a bad faith claim against an insurance company significantly more challenging when policyholders deal with recalcitrant insurance companies. 

The decision essentially eliminated the right to pursue a common law claim for good faith and fair dealing that applies to other types of contract disputes.  Policyholders must pursue a first-party property damage claim for bad faith against insurers under Fla. Stat. Section 624.155.  This statute requires that breach of contract and bad faith claims against an insurer be bifurcated, so the bad faith claim must be pursued in a separate lawsuit after the insured prevails in the breach of contract lawsuit.  Since the claims are so closely intertwined in terms of evidence and issues, this approach is wasteful and costly for the policyholder.  This bifurcation requirement often results in a policyholder abandoning a legitimate bad faith claim even after prevailing in a breach of contract claim against an insurance carrier.

The Florida Supreme Court decision also created another challenge for policyholders, which can be exploited by insurance companies.  Insurance companies frequently object to evidence sought through the discovery process in the breach of contract lawsuit on the grounds that such evidence is relevant to the bad faith phase of the case.  This strategy is employed by Florida insurance companies to shield juries from evidence regarding the carrier’s systematic practices of denying and underpaying claims.

Fortunately, there is good news for policyholders in terms of the cost of pursuing litigation in first-party insurance claim disputes.  An insured does not need to establish bad faith by the insurance company to obtain reimbursement of attorney fees though this is required in a majority of jurisdictions.  Under Fla. Stat. Section 627.428, an insured can recover attorney fees incurred in enforcing an insurance policy. 

You can reach Miami 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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