New Florida Law Makes it Harder to Sue Insurance Companies for Bad Faith

New Florida Law Makes it Harder to Sue Insurance Companies for Bad Faith

Florida’s bad faith insurance laws empower policyholders to take legal action against insurers for unsatisfactory claim resolutions. These laws encompass scenarios where insurers either deny claims wrongfully or miss reasonable opportunities to settle. The distinction between first-party and third-party bad faith is crucial. First-party bad faith relates to insurers improperly denying, delaying, or underpaying the policyholder’s own claims. For instance, if your insurer denies a legitimate claim after a car accident, it’s a first-party bad faith. On the other hand, third-party bad faith arises when insurers inadequately defend a policyholder against lawsuits, potentially exposing them to damages beyond their policy limits. Understanding these nuances ensures better protection of one’s legal rights in insurance matters.

How does HB-837 Affect Bad Faith Insurance Claims?

On March 24, 2023, Florida Governor, Ron DeSantis signed HB-837 into law. HB-837 significantly modified the bad faith insurance framework. Previously, if a victim sent a settlement offer with a 30-day deadline for the insurer to respond and the insurer failed to respond during that time, the insurer could be held responsible for the full measure of damages – regardless of the policy limits. Today, an insurer can now avoid a claim for bad faith if it “tenders the lesser of the policy limits or the amount demanded by the claimant within 90 days after receiving actual notice of a claim which is accompanied by sufficient evidence to support the amount of the claim.”

HB-837 also adds that that “[m]ere negligence alone is insufficient to constitute bad faith.” See Berges v. Infinity Ins. Co., 896 So. 2d 665, 687 (Fla. 2004) (Wells, J., dissenting) (“To establish a breach
of this duty, claimants must demonstrate more than mere negligence; they must prove the insurer acted in bad faith.”). This makes it much more difficult for insureds to pursue insurers for bad faith claims and
reduces insurer’s exposure in litigation. As such, a bad faith lawsuit against an insurer can be extremely complicated, and it may be in a policyholder’s best interest to contact or hire an experienced personal
injury lawyer

If you believe your insurance company has acted in bad faith, please do not hesitate to contact the Printy Law Firm online or call (813) 434-0649 for a free consultation.