Many insurance policyholders are not aware that insurers have a duty to act in good faith when processing an insurance claim. Policyholders should reasonably anticipate that their carrier will handle their claim in a fair and honest fashion. When insurers fail to meet their obligations of good faith claims handling, policyholders sometimes accept the position of the insurance company because they believe there is no realistic chance of successfully challenging the insurance company’s decision.
However, Florida Statute Section 624.155 empowers a policyholder to pursue litigation against an insurer who acts in bad faith in investigating and resolving an insurance claim. Damages above the policy limits, attorney's fees, and even punitive damages can be sought depending on the facts and circumstances.
Insurance companies frequently assert that information provided on an insurance application is false or misleading. Material non-disclosures or misrepresentations can provide a viable defense to claims that an insurer acted in bad faith when processing a claim. In fact, the insurer can rescind the policy entirely in certain situations. This is important because an insurer can successfully assert a defense based on inaccuracies in a policy application whether they are the product of an innocent mistake or an intentional attempt to defraud the insurer. When the insured signs the form, the policyholder attests to the accuracy of the information provided.
If an insurance company acts in bad faith in processing a claim, the policyholder needs an experienced insurance claims lawyer because the process of proving bad faith can be challenging. The standards that are used to evaluate acts of bad faith by an insurance company include:
- The insurer failed to diligently investigate the claim.
- The policyholder and insurer disagree about the substance of the policy.
- An insurance company undertakes no real effort to resolve a liability claim in a prompt fashion, so the insured is subject to more significant liability.
Bad faith insurance lawsuits can be the only effective remedy for policyholders in certain situations. A common basis for bringing a bad faith action is the failure of an insurer to adequately investigate and evaluate a claim. If your Miami insurance claims lawyer effectively presents evidence that this has occurred, the insurance carrier might be compelled to pay damages beyond the value of your claim, such as punitive damages. While not every denial of coverage constitutes insurance bad faith, you should contact an experienced lawyer if you have questions about your rights and remedies.
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.