Recently, a bill was introduced in the Florida Senate that could negatively impact Florida residents who find it necessary to file a bad faith action against an insurance company. Florida Senate Bill 632 seeks the same end as Florida House Bill 5 (introduced in August 2015), which is to make it more difficult for Floridians to bring a bad faith claim by imposing another hurdle that must be surmounted prior to being able to file a lawsuit. These bills would require those seeking to file a bad faith claim to first file a written notice of loss. The law would not affect first-party bad faith claims brought pursuant to Florida statute, but third-party bad faith claims would be affected.
Florida and Bad Faith Claims Reform
The House and Senate bills are two recent “warning shots” in a years-long standoff between state legislators and insurance companies over the issue of bad faith reform. Insurance companies for some time have lobbied the legislature to change Florida’s bad faith law in such a way that the number of bad faith lawsuits filed each year in the Sunshine State will decrease. Previous reform efforts have, for example, sought to give insurance companies additional time to respond to claims before an insured or a claimant can file a bad faith action. Insurance companies decry bad faith lawsuits as a means by which “greedy trial attorneys” and their clients can “trap” innocent insurance companies into situations in which the carrier must pay sums of money that greatly exceed policy limits.
The Florida State Legislature is now being pushed to alter the method by which bad faith insurance claims are filed or prosecuted. Some lawmakers are convinced that no reforms are needed as there is no “crisis” involving an excessive amount of lawsuits being filed. However, other lawmakers have been persuaded by lobbying efforts of groups with interests aligned with insurance companies.
Should Floridians Be Concerned About This Recent Legislation?
The requirements of the House bill and the Senate bill may at first appear innocuous and not overly burdensome. After all, most claimants would ordinarily send some type of writing to the insurance company at some point during the claims process. But written in the fine print of the bills is a “delay mechanism.” In the Senate bill, for instance, an insurance company is to be given 45 days after it receives your written notice to respond to the claim by either settling the claim or taking other action.
Under the proposed legislation, a policyholder might notify the insured’s insurance carrier in November about a claim and make a demand to the carrier to pay the policy’s limits. The insurance carrier would be under no obligation to meet your demand until you deliver to the carrier (and it receives) a written notice. If the carrier never receives the notice, you would not be able to bring a third-party bad faith claim against the insurance carrier – regardless of what its representatives tell you or what other actions the insurance company does or does not take in handling your claim.
If you have questions about an insurance claim, you are invited to contact our law firm to speak to an experienced Miami insurance claims attorney. My law firm specializes in representing policyholders in claims disputes in Miami and throughout Florida. Click here to read about some of our case results. 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.