IRC: Florida No. 3 in Bad Faith Insurance Claims

A recent analysis by the Insurance Research Council reveals Florida is No. 3 in the nation when it comes to bad faith insurance lawsuits for claims of bodily injury liability in car accidents, at an additional claim cost of some $7.6 billion in the last dozen years.Florida bad faith insurance attorney

What is bad faith insurance? Let’s start with the fact that the majority of Floridians are covered by some type of insurance, whether it’s auto insurance, home insurance, health insurance, boater’s insurance, flood insurance, commercial liability insurance or life insurance. When you obtain an insurance policy, you enter into a contract with an insurer. You agree to abide the terms of that policy – pay the premium each month on time, etc. – while the insurer agrees to cover the losses or damages – up to a certain amount –  resulting from circumstances as outlined your policy.

Insurers act in bad faith when they try to walk back on their obligations to you, sometimes by refusing to pay a legitimate claim or even agreeing to investigate it. Other times, they will take an unreasonable amount of time to process a claim or offer you far less than they claim is worth, knowing full well you should be paid more. It goes beyond simply a disagreement with an adjuster or even an honest mistake. Florida takes bad faith insurance very seriously, and per F.S. 624.155, an insurer found to have engaged in bad faith can be compelled to pay not just compensatory damages (to make up for your losses) but also punitive damages – up to triple the amount you were originally owed.

If you believe an insurer has treated you unfairly, it’s imperative that you contact a South Florida bad faith insurance lawyer. Individuals have scant chance of prevailing on their own, or per se, in a bad faith insurance lawsuit. Insurance companies are allowed 60 days by law (called a “safe harbor period” in which to investigate your allegations of bad faith and be given the opportunity to correct them) before you can pursue a bad faith claim.

Rise in Florida Bad Faith Insurance

Bad faith insurance action in Florida can only be filed by a third party, meaning there is no direct cause of action and one must obtain a judgment against a third party before seeking payment from the insurer.

The IRC’s latest estimates of Florida third-party bad faith insurance indicated that enormous cost burden of these claims add some $106 in claim cost to every insured vehicle in the state last year.

Our South Florida bad faith insurance lawyers must note here that the council touts itself as an independent, nonprofit research firm, it is also one expressly supported by the top casualty and property insurance companies and associations in the U.S. Some of the conclusions, therefore, are suspect, but we have no reason to question the raw data.

The report compares specifically the trend in car accident bodily injury liability claims in Florida with those of three other sizable states that have also adopted a no-fault auto insurance system: Pennsylvania, New York and New Jersey. These three states, the IRC says, mostly adheres to an administrative approach when investigating and resolving assertions of bad faith insurance by auto insurers. Each of those three, the IRC stated, had relatively stable bad faith costs over the study period.

The IRC asserts Florida is different in that it allows “a virtually unrestricted ability to file a third-party bad faith lawsuit against insurers.” A spokeswoman for the IRC stated this fact, combined with large settlements and court judgments for bad faith insurance, are an incentive for people to file such claims who otherwise would not.

But of course, that statement tells us nothing of the legitimacy of these claims. In other words, of course if you make it more difficult for people to prevail in court, they will be less inclined to pursue legal action. That, however, doesn’t lessen the underlying viability of your claim or entitlement to damages.

South Florida Bad Faith Lawsuits Necessitate Legal Team With Experience

The reality is Florida bad faith insurance lawsuits are not easy or simple to win. No one is guaranteed a big payout. For example, in refusal to pay a claim without a reasonable basis, it’s not enough to simply show the insurer refused to pay your claim. You have to establish why it was reasonable, the fact that you gave them all the information necessary for them to know it was reasonable, that the adjuster didn’t simply have a difference of opinion and that this was not a simple error. These things can be subjective, though there is a substantial amount of case law in addition to statutory guidelines that has helped establish parameters.

And while the IRC notes a “rapid growth” in bodily injury liability claims, there is no evidence presented that this is the result of nefarious or dishonest action on the part of car accident victims. For one thing, The New York Times, citing data from the National Safety Council, revealed crash deaths had risen markedly in 2017, the second year in a row – totaling a 14 percent uptick just in that short time frame – after years of declining traffic deaths. Florida had one of the highest rates of traffic fatalities in the country.

Finally, we must bear in mind that such claims would be filed, let alone paid, if insurers were abiding the contract they agreed to when they signed of on the policy with insured. If insurers were participating in reasonable, timely and fair bodily injury settlement negotiations following a crash, there would never be a need for a bad faith insurance claim.

Contact the South Florida personal injury attorneys at David J. Halberg, P.A., Attorneys at Law, by calling toll-free at 1-877-425-2374. Serving West Palm Beach, Miami, Tampa, Orlando and Fort Myers/ Naples. There is no fee unless you win.

Additional Resources:

Study Estimates Florida Third-Party Bad-Faith Costs at $7.6 Billion for 12-Year Period (2006-2017), Sept. 18, 2018, Insurance Research Council

More Blog Entries:

Mirroring Florida Injury Lawsuit Precedent, New Jersey Rejects Expert Witness Mandate, July 30, 2018, South Florida Bad Faith Insurance Lawyer Blog