What is Bad Faith?

When someone purchases insurance, they expect the insurance company to pay their accident claim. This does not always happen. Insurance companies will sometimes look to minimize their costs by denying or devaluing a claim. 

Suppose an insurance company refuses to accept a claim, devalues a claim unreasonably, or fails to investigate the claim properly. In that case, a claimant can hold the insurance company liable for bad faith insurance practices. If you believe you have a bad faith claim, it is important to speak to an experienced Clearwater personal injury attorney right away. Contact our Cleawater law office today at (727) 796-8282.

What is a Bad Faith Claim?

An insurance company acts in bad faith when it does not conduct business with a claimant fairly and honestly. Bad faith claims can occur when an insurance company acts unreasonably in denying or devaluing a legitimate insurance claim. They can also occur if an insurance company fails to investigate a claim timely. 

If an insurance company should have settled a claim and failed to do so, then the insurance company can be liable for bad faith.

If you file a claim with an insurance company, don’t expect the company to simply adhere to your demands. The company is still a business that is looking to protect its financial interests. It is allowed to investigate your claim and offer reasonable settlement offers for your claim, even if the offer is lower than your claim.

Types of Florida Bad Faith Claims

In Florida, there are two main categories of bad faith claims: first-party claims and third-party claims. The main difference between first- and third-party claims is who makes a claim. If you are an insured injured in an accident, you would be a first-party claimant

If your insurance company unreasonably denies your claim or assesses it at an unreasonably low value, you would have a viable first-party claim against the insurance company.

Suppose you were injured in an accident caused by someone else. If you make a claim against the at-fault party’s insurer, you would be a third-party claimant. A third-party claimant makes a claim against someone else’s insurance company to cover injuries or losses caused by someone it insures. For example, if you are a passenger injured in an accident, you would have a viable third-party claim against the driver’s insurance company.

If you are a first-party claimant, you can file a claim against your own insurance policy. This policy could be auto insurance, health insurance, homeowner’s insurance, as well as fire, flood, or hurricane insurance. If you are a third-party claimant, then you can file a claim against someone else’s insurance policy.

What Are Statutory Bad Faith Insurance Claims?

Florida insurance companies are required to operate under certain guidelines when processing and evaluating claims. A violation of the Florida Unfair Insurance Trade Practices Act will constitute bad faith by an insurance company. 

Some examples of bad faith under the Act include:

  • Attempting to settle an altered claim without the claimant knowing it was altered
  • Not investigating a claim in an appropriate time
  • Not investigating before denying a claim
  • Attempting to induce a claimant into a settlement through misrepresentation of a fact or circumstance
  • Not communicating with the claimant regarding their claim
  • Not putting claim decisions in writing

The actions listed above can be the basis for both first- and third-party claims. Bad faith claims can also be made under common law if the circumstances allow. Make sure to have any bad faith claims evaluated by an experienced attorney.

Important Things to Remember About Your Claim

If you accuse an insurance company of bad faith, it will look to defend itself however possible. A possible defense is claimant negligence. If a claimant lies about damages or fails to contact the insurance company regarding their claim, they can lose their bad faith claim. 

Therefore, you should take diligent notes and maintain records of communications with the insurance company. Proper documentation can be the key to winning your bad faith claim.

Contact an Attorney For Help

If you are a victim of an insurance company acting in bad faith, then make sure you get in touch with an experienced attorney as soon as possible. Often, insurance companies will try to take advantage of injury victims who do not have legal representation. 

Your attorney can hold them accountable for a legitimate claim and ensure they play fair during the claim process.