What Does The Term “Bad Faith” Insurance Mean?
“Bad faith” means the insurance company has failed to act fairly and honestly with respect to the investigation and payment of a claim. It really means the insurance company acted in bad faith in the handling of a claim. There are two types of “bad faith” claims, first-party and third-party claims. A first-party claim is one made by an insured against her own insurance company. These are typically claims made against a health insurer, under the medical payments provisions of a homeowner’s policy, or under a fire, flood, or other hazard policy.
A third-party claim is one where you have been sued by another, and the insurance company does not act in good faith in settling the claim under circumstances where it should have done so; and, as a result, the policy holder is exposed to damages in excess of her insurance coverage. There is also a statutory cause of action for bad faith in Florida where the insurance company has engaged in unfair claim settlement practices, such as failing to acknowledge or promptly respond to communications, denying claims without doing a reasonable investigation, or denying a claim without providing any reason for the denial.
What Are Some Examples Of “Bad Faith” Conduct?
In addition to the examples above, some specific examples of bad faith conduct are:
- offering a nominal sum to its insured for a water damage claim shown to have cost the homeowner three times what the insurance company offered;
- failing to settle an auto negligence case brought against its insured for the policy limits and later having a judgment entered against the insured for a sum far in excess of the policy limits.
How Do I Know If I Have A “Bad Faith” Insurance Claim?
This is a very technical area of the law, and it is important to hire an attorney as soon as possible. There are certain steps that must be taken first before a bad faith claim can be pursued. If you suspect the insurance company is not acting fairly and honestly, it is important to consult an attorney right away.
What If My Insurance Company Continues To Deny My Claim And Commits Bad Faith?
Hire an attorney. You do not have to accept the insurance company’s decision to deny your claim, or to pay you less than you think your claim is worth. If you are not happy with the way the insurance company is handling the claim, contact a lawyer.
What Can I Recover If I Sue My Insurer For Bad Faith?
You may recover whatever damages will make you whole. You may also be able to recover punitive damages, which are designed to punish an insurer for bad faith conduct.
For more information on Bad Faith Insurance Cases In Florida, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (954) 900-9575 today.