What is a Civil Remedy Notice of Insurer Violation?

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

Before a statutory first-party bad faith claim may be brought against an insurer, Florida Statute §624.155 requires the insured to provide both the department of insurance and the insurer a civil remedy notice. The statute further provides that this notice must be in written form, at least 60 days before bringing suit, and has several other requirements relating to the substance of the notice. For example, the statute provides that for the notice to be proper it must be made on a form provided by the department and must provide the specific facts involved in the violation, the policy language that applies to the case, the statutory provision that the insured allegedly violated, and the names of any individuals that are associated with the claim. Once the insurer and the department receive the civil remedy notice, the insurer is then given a 60-day window of opportunity to cure the alleged violation. If the insurer pays the damages or corrects the violation in some other way, then the insured is prevented from filing a bad faith action under this statute.

The requirement that the insured provide a proper civil remedy notice is strictly construed. Thus, a bad faith action under this statute will not be entertained if the insured either fails to file a written notice with the department or fails to provide adequate notice to the insurer. With respect to the department, the notice is intended to allow the department to monitor and investigate the various aspects of these claims. Although the department does not actually get involved in the settling of the claims, the notice allows the department to monitor the insurance industry. Moreover, the Florida legislature enacted this statute with the claimed intention of reducing unnecessary bad faith litigation by allowing insurance companies to cure whatever violation they have committed giving rise to the bad faith claim.

Although no specific cure amount is needed, the civil remedy notice must give sufficient information to adequately inform the insurer of the nature of the claim and the insured’s right to recover. This 60-day window of opportunity is the insurer’s last chance to settle the claim. If the facts of the claim indicate that benefits are owed, and that an insurer acting in good faith and in all fairness to the insured would pay the claim under the circumstances, then the insured may bring a bad faith lawsuit against the insured at the expiration of the 60-day window, assuming the insurer did not cure.

If the insurer is later found to have acted in bad faith, it will be liable for the insured’s attorney’s fees, court costs, and damages, and may even be subject to punitive damages under certain circumstances. Moreover, if the insured has been subjected to a judgment in excess of the policy limits, and the insurer had an opportunity to accept a settlement within the policy limits, and reasonably should have done so under the circumstances, then the insurer cannot simply cure the violation by offering the insured the policy limits. Because the insured did not act in the best interest of the insured when it had the chance, the proper cure in these circumstances is for the insurer to pay the entire cost of the excess judgment. Moreover, attorney’s fees can be very costly, and pursuing these claims can be time consuming. Thus, when insurance companies force their clients to pursue these claims because they didn’t want to settle when they had the chance, it is only right that attorney’s fees should be awarded to the plaintiff.

Additionally, and insured will not be precluded from pursuing a bad faith action simply because the insurer has agreed to pay the damages. The statute imposes a clear mandate to either pay the damages or correct the situation. Thus, an agreement to pay is not the same as paying the claim and a bad faith suit will not be barred on these grounds. The civil remedy notice allows regulatory agencies the opportunity to detect consistent patterns of bad faith conduct. Insurance companies with patterns of improper conduct may be sanctioned harshly by regulatory agencies.

These claims are an important tool in insurance litigation because they reduce an insurer’s incentive to deny claims simply because they are looking to increase their profit margins. Insurance contracts would be meaningless if there were no mechanism to check unfair and deceptive insurance practices, and the civil remedy notice is an efficient method for enforcing the insured’s contractual rights. Despite the sanctions associated with bad faith suits, insurance companies all too often deny claims in bad faith. If you have been struggling with your insurance company to get your claim paid you should consult an experienced insurance claims attorney. 

You can reach Miami Bad Faith 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].

Sources

§ 624.155(3)(a)