What’s a Bad Faith Claim?

When you buy insurance, you expect your insurers to reimburse your losses after a covered accident. Insurance companies, however, will always look to protect their bottom line and may deny or devalue a claim. If insurance companies fail to investigate a claim or act unreasonably, they can be liable for bad faith dealings. 

If you have a bad faith claim, then it is important that you speak to an experienced attorney.

What is a Bad Faith Claim?

A bad faith claim is a claim against an insurance company for denying or devaluing a claim unreasonably. Bad faith on the part of an insurance company occurs when the company fails to settle a claim it should have settled. Bad faith also implies that the insurance company did not act fairly and honestly towards the claimant. 

If a claimant properly files a claim and demonstrates that they should be compensated, then an insurance company can be held liable for failing to settle. Insurance companies are permitted to negotiate reasonable settlements related to their claims. However, when insurance companies go too far in trying to protect their bottom line, bad faith claims can arise.

Types of Florida Bad Faith Claims

There are two types of bad faith claims in Florida: first-party claims and third-party claims. A first-party claim deals with a person who the insurance company insures. If an insurance company unreasonably denies or devalues a claim of its insured, they would have a first-party bad faith claim. 

A third-party claim deals with a “third-party” making a claim against the policy of an insurance company’s insured. For example, if you are involved in an accident and your passenger is injured, the passenger would file a third-party claim against your insurance to cover their injuries. Likewise, if another driver caused your accident, you might make a claim against their insurance for damages.

If an insurance company unreasonably denies or devalues a third-party’s claim, they would have a bad faith case against the insurance company.

First-party insurance claims can include claims against a health insurance policy, homeowner’s policy, and fire, flood, or tornado insurance. All first-party claims are made by the insured themselves.

Third-party insurance claims can include claims against an auto insurance policy, homeowner’s policy, malpractice policy, or commercial liability insurance.

Statutory Bad Faith Insurance Claims Explained

Under Florida law, insurance companies have several duties towards their insureds and any third-party claimants. 

The Florida Unfair Insurance Trade Practices Act outlines bad faith practices by an insurance company, including:

  • Trying to settle a claim that was altered without the claimant’s knowledge
  • Failing to timely investigate a claim
  • Denying a claim without an appropriate investigation
  • Misrepresenting something to the claimant to induce them into a settlement
  • Failing to timely communicate with the claimant
  • Failing to explain why a claim was denied or devalued in writing

Both first- and third-party bad faith claims can be made against an insurance company for the conduct listed above. These claims can also be brought under common law, depending on the circumstances. 

Important Things to Remember About Bad Faith Claims

If accused of bad faith, insurance companies will look to push blame onto the claimant by alleging they exaggerated their damages or failed to communicate with their insurance adjusters. Therefore, you should try to communicate with the insurance company in writing if you can. 

Make sure to keep good records of any communications with the insurance company. The more documentation and records that you have regarding your bad faith claim, the more likely you will be successful.

Contact a Tampa Personal Injury Attorney for Help 

If you have a bad faith claim, then you should get in touch with an experienced personal injury attorney right away. This area of insurance law can be confusing and difficult to manage without the necessary experience. Insurers will take your claim seriously when you hire legal counsel to assist you.

Our experienced attorneys at Catania & Catania, P.A. will help you with your bad faith claim. To learn more, contact our law office in Tampa, Florida, or call us at (813) 222-8545 to discuss your case.