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What is a Bad Faith Insurance Claim?

Have you ever found yourself in a situation where you faithfully paid your insurance premiums, only to have your claim denied due to bad faith practices by your insurance company? Luckily, there are ways to find a resolution to this matter.

Our Florida property damage lawyers can help you file a bad faith insurance claim.

What Is Bad Faith?

Under Florida Statute 624.155, bad faith is an unethical practice in the insurance industry when an insurer does not attempt to settle a claim fairly and promptly.

This can occur when the insurer does not make a reasonable effort to investigate a claim or pay out the amount that is due, even when all of the circumstances indicate that they should do so.

Insurance carriers are expected to act in good faith when dealing with their customers. This includes providing fair and honest services, as well as making sure that the customer’s interests are protected.

When an insurance carrier breaches this implied duty to fair dealing and good faith, they are said to have acted in bad faith.

Every party or individual involved in the insurance claims process has an important role to play in ensuring that the client is provided with the best possible outcome.

What Is a Bad Faith Insurance Claim?

Bad faith claims against insurance companies are a form of legal action in which a person or entity who purchased insurance brings a lawsuit against the insurance company for not acting in good faith.

This type of claim may arise when an insurance company denies coverage for a claim, fails to pay out the policy benefits, or delays payment without reasonable cause. In these cases, the insured party may be entitled to compensation for any damages incurred as a result of the insurer’s bad-faith behavior.

The purpose of this type of litigation is to ensure that insurance companies act in good faith and honor their contractual obligations to their customers.

Unfair Practices by Insurance Companies

Florida Statute 624.155 also says that it is allowed for individuals to bring claims for damages caused by statutorily-defined unfair claims settlement practices.

Some examples of bad faith insurance practices include:

  • Whenever there is an attempt to settle a claim based on an application that has been altered without notice to, or knowledge or consent of, the insured.
  • If there is a material misrepresentation to the insured settle the claim on less favorable terms than those provided for by the policy.
  • If the insurance company fails to adopt or implement standards for properly investigating a certain claim.
  • If a misrepresentation occurs of pertinent facts or insurance policy provisions.
  • When the insurance company fails to acknowledge and respond promptly to communications concerning claims. Many insurers are known to take their time when it comes to answering claims.
  • Failing to affirm or deny coverage of claims promptly.
  • Failing to provide a written statement that the claim is being investigated upon the written request of the insured within 30 days after proof-of-loss statements have been completed.
  • If the insurance company does not provide a reasonable explanation in writing to the insured concerning the facts or applicable law, for either denial of a claim or the offer of a lower settlement.
  • Whenever the insurance company fails to promptly notify the insured of any additional information necessary for the processing of a claim.
  • When there is a lack of clear explanation of the nature of the requested information and the reasons why such information is necessary.

What Can You Do About Insurance Bad Faith?

If you believe that your insurance company has acted in bad faith or breached the terms of your contract, then you may have the right to take legal action against them.

This could mean filing a lawsuit or seeking compensation for damages caused by their actions. It is important to understand that if you decide to pursue legal action, it is important to ensure that all of the necessary documents and evidence are in order before taking any steps.

Taking the time to properly document and prepare for a potential court case can make all the difference in receiving a favorable outcome. An experienced lawyer should advise further regarding this aspect.

Speak to our Florida Property Damage Lawyers Today!

If you suspect your insurance company is acting in bad faith with your current claim, consulting a property damage lawyer might work to your advantage. Here at Klotzman Property Damage Law, we advocate for fair compensation so you can properly restore and repair any damage.

Schedule your free case review today with our Florida property damage attorneys. When insurance companies fail, Klotzman Property Damage Law succeeds.