How to Sue an Insurance Company for Bad Faith

Insurance companies don’t always do the right thing. Even though you pay for your policy, the insurance company may still try to pad their bottom line by denying a reasonable claim. What happens if the insurance company doesn’t pay like they’re supposed to? What do you do if the insurance company stalls or refuses a good claim? Florida law has an answer for what to do if your insurance company doesn’t do the right thing. You can sue your insurance company for bad faith.

How Do You Sue an Insurance Company for Bad Faith?

To sue an insurance company for bad faith, you file a lawsuit in the appropriate court. In the lawsuit, you state what the insurance company did or failed to do that amounts to good faith. You must show that the insurance company failed to act in good faith when it comes to processing your claim and honoring the terms of your policy. You must explain how the insurance company’s actions hurt you financially. The case is a civil case.

What is Bad Faith By an Insurance Company?

Bad faith occurs when an insurance company takes steps to avoid honoring an insurance policy or fairly paying a claim. Insurance companies must go about their business honestly. They must be fair with their customers and with third-parties that make claims against the insurance policies. If an insurance company tries to avoid paying a valid claim, their actions may amount to bad faith. Bad faith on the part of an insurance company gives rise to legal liability for the damages that result.

If an insurance company sells an insurance policy, they must pay valid claims against the policy. They may not commit fraud, and they may not purposefully avoid paying good claims. Bad faith laws exist to make sure that people have recourse when an insurance company doesn’t do their job honestly.

How to Sue the Insurance Company for Bad Faith

A bad faith insurance claim is an independent cause of action. You don’t have to attach a bad faith claim to an accident lawsuit. In fact, in many cases, you can’t bring a bad faith claim until a third-party has a judgment. An experienced bad faith insurance attorney can help you determine when and how to file your claim.

What Are Some Examples of Insurance Company Bad Faith?

Insurance fraud depends on the exact circumstances of the case. Here are some examples of insurance company bad faith:

  • Refusing to pay a claim when the claim is valid
  • Trying to pay less than the claim is worth
  • Offering too little of a settlement based on undisputed facts
  • Denying facts when the evidence supports them
  • Causing unreasonable delays in the case
  • Ignoring phone calls, emails and other attempts to communicate
  • Trying to intimidate someone making a claim
  • Being overly rude or threatening in a way that’s meant to avoid paying a claim
  • Trying to overwhelm you with work
  • Misrepresenting what the policy says and what it means

There may be other actions by the insurance company that amounts to bad faith. The insurance company doesn’t have to be perfect, but they must conduct business honestly.

How Do I Prove Bad Faith in My Insurance Claim?

You might know that the insurance company isn’t doing the right thing, but you may not know how to prove it. If you suspect bad faith in your case, you can prove your case by documenting the actions of the insurance company. Keep all correspondence you receive whether it’s email, letters or phone calls. Every time you speak to a representative on the phone, jot down notes about the date of the conversation and the topics of discussion. Ask the insurance company to confirm everything in writing. Make sure that you respond to contacts from the insurance company.

What Can I Do if the Insurance Company Acts in Bad Faith?

If your insurance company acts in bad faith, you can bring a legal claim for financial compensation. You may also file a complaint with the Florida Division of Consumer Services. If your goal is financial compensation, it’s important to speak with an attorney for bad faith insurance claims in addition to filing a complaint with the State of Florida.

Florida Laws for Insurance Bad Faith

Florida has civil laws that cover insurance bad faith. Florida law 624.155 codifies the law that requires insurance companies to act honestly. The law covers not settling a claim that the insurance company would have settled if they had acted in good faith. It also includes failing to explain the basis for denying a claim. Finally, it covers failing to work fast enough to resolve a claim. Florida law requires you to give the insurance company a 60-day notice before filing a civil action. The law allows for punitive damages in some cases.

Updates in Florida Bad Faith Insurance Laws

The Florida Supreme Court recently made it easier for victims of bad faith to get fair compensation. In the Harvey v. GEICO case, there was a car accident. Harvey was the responsible party.

The insurance company failed to work on Harvey’s behalf. They didn’t make any attempts to settle the case or warn Harvey that the judgment might be more than the insurance policy limits. The Florida Supreme Court said that because the insurance company’s actions contributed to a judgment that was probably higher than it would have been, the insurance company acted in bad faith. The Court said that an insurance company must act with the same urgency as if they’re in the shoes of the policyholder.

Bad Faith Insurance Claims in Florida

If you believe the insurance company isn’t being honest or fair, our attorneys can help you evaluate the situation. You may have the right to a financial remedy. Jack Bernstein, has decades of experience helping victims of insurance company bad faith make it right. Contact us today for a friendly discussion of your case.

About the Author

Jack G. Bernstein, ESQ.

For more than 36 years, personal injury lawyer Jack G. Bernstein has protected the rights of individuals who have been injured in a variety of circumstances. Mr. Bernstein is a member of the Florida State Bar Association, the Hillsborough Bar Association and the Clearwater Bar Association.

The information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter.