Articles Posted in Insurance Disputes

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After a Florida accident, most injury victims try and recoup some or all of their damages from their car or home insurance provider. Although consumers expect their insurance company to resolve their claims in good faith, many claimants find themselves in dire financial straits when their company fails to resolve their claims fairly or promptly. Under Florida law, insurance companies must “act fairly and honestly towards its insured” with regard to the policyholder’s interests. Despite the law, insurance companies frequently act with the company’s financial interest in mind, even if it is contrary to the insured’s interest. If a policyholder believes that an insurance company is acting in bad faith in resolving their claims, they may file a lawsuit to demand relief.

Bad faith occurs when an insurance company acts unreasonably towards a policyholder, or otherwise breaches their fiduciary duty to an insured. Determining whether an insurance company acted in bad faith involves evaluating the length the company went to and its efforts in resolving claims in favor of the insured. Insurance companies should take prompt measures to investigate a claim thoroughly, evaluate liability, assess damages, communicate findings with appropriate parties, and settle claims. However, Florida insurers may face bad faith claims if they fail to engage in these steps or if their policies are inherently ambiguous.

Typically, disputes regarding insurance contracts follow the rules generally accepted under contract law. When there is a material, ambiguous term in the contract, the court will construe the term against the company and in favor of the insured. The contracts are viewed as a whole, and if the language is clear, the court will interpret the terms according to their generally accepted plain meaning. To avoid these issues, Florida lawmakers stress the importance of carefully drafted insurance policies that consumers can understand. Although current trends in the law favor insureds, in some cases, courts will find in favor of an insurance provider, despite claims of ambiguous terms.

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Under Florida law, insurance companies must act in “good faith” when addressing and resolving an insurance claim made against a policy. However, in many cases, insurance companies fail to do this. Through a Florida bad faith claim, state law provides policyholders with an avenue to seek restitution if they believe that an insurance company has engaged in bad faith practices when attempting to resolve a claim.

Bad faith claims arise if an insurance company breaches its duty to recognize a claim, investigate a claim promptly, respond appropriately to communication requests, act efficiently, or offer valid reasons for a delay or denial. There are generally two types of Florida bad faith claims, first-party and third-party claims. First-party claims occur when an insurance company has a contractual duty to pay benefits to its policyholder. Whereas, third-party coverage protects the policyholder in cases where they may be liable for injuries and damages to a third-party.

Under the law, policyholders who are asserting a bad faith claim must provide the insurance company with a notice of the statutory violation. After receiving the notice, the law provides the insurance company with an opportunity to cure the violation, by paying the claimant’s damages. If the company cures the violation within the time frame, the bad faith claim becomes irrelevant. However, if the company fails to respond, the courts will presume that the plaintiff’s assertion is true.

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