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Bad Faith

FLORIDA

Florida has adopted a version of the UCSPA. Fla. Stat. §626.9541 (1976/1990).
Florida has adopted Fla. Stat. §626.9743-626.9744 (2004) (Motor vehicle settlements).
Florida has adopted a version of the UCSPA Model Regulation. Fla. Admin. Code Ann. Rev. 690-
166.021 to 69O-166.031 (1992/2004).

Florida does not recognize a common law cause of action for bad faith against a first-party
insurer. Time Ins. Co., Inc. v. Burger, 712 So.2d 389, 391 (Fla. 1998).
However, Florida has enacted a Civil Remedy Statute, Fla. Stat. § 624.155 (CRS), which
authorizes first-party bad faith actions against insurers. The CRS states:

(1) Any person may bring a civil action against an insurer when such person
is damaged. . .
(a) By the commission of any of the following acts by the insurer:
1. Not attempting in good faith to settle claims when, under
all the circumstances, it could and should have done so,
had it acted fairly and honestly towards its insured and
with due regard for her or his interests;
2. Except as to liability coverages, failing to promptly settle
claims, when the obligation to settle a claim has become
reasonably clear, under one portion of the insurance
policy coverage in order to influence settlements under
other portions of the insurance policy coverage.

Fla. Stat. § 624.155(1)(b).
The CRS allows individuals to bring claims for damages caused by statutorily-defined unfair
claims settlement practices. Fla. Stat. § 624.155(1)(a)(1). Such unfair claims practices include:
1. Attempting to settle a claim on the basis of an application that has been
altered without notice to, or knowledge or consent of, the insured;
2. Making material misrepresentations to the insured in order to settle the
claim on less favorable terms that those provided for by the policy;
3. A general business practice of:
a. Failing to adopt and implement standards for the proper
investigation of claims;
b. Misrepresenting pertinent facts or insurance policy provisions;
c. Failing to acknowledge and act promptly upon communications
with respect to claims;
d. Denying claims without conducting reasonable investigations
based upon available information;
e. Failing to affirm or deny full or partial coverage of claims, and, as
to partial coverage, the dollar amount or extent of coverage, or
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;
f. Failing to promptly provide a reasonable explanation in writing to
the insured of the basis in the insurance policy, in relation to the
facts or applicable law, for denial of a claim or for the offer of a
compromise settlement;
g. Failing to promptly notify the insured of any additional
information necessary for the processing of a claim; or
h. Failing to clearly explain the nature of the requested information
and the reasons why such information is necessary.
Fla. Stat. § 626.9541(1)(i).

To bring a claim, an insured must provide written notice to the Department of Financial
Services and the insurer at least 60 days before suit is filed. Fla. Stat. § 624.155(3)(a). The
written notice must state:
(1) The statutory provision, including the specific language of the statute, which the
authorized insurer allegedly violated;
(2) The facts and circumstances giving rise to the violation;
(3) The name of any individual involved in the violation;
(4) Reference to specific policy language that is relevant to the violation, if any. If the
person bringing the civil action is a third party claimant, she or he shall not be required
to reference the specific policy language if the authorized insurer has not provided a
copy of the policy to the third party claimant pursuant to written request; and
(5) A statement that the notice is given in order to perfect the right to pursue the civil
remedy authorized by this section.
Id. at (b).

Damages
Consequential damages are available when they are reasonably foreseeable and are natural,
proximate, probable, or a direct consequence of an insurer’s bad faith. McLeod v. Cont’l Ins. Co.,
591 So. 2d 621, 626 (Fla. 1992); Heritage Corp. of South Florida v. National Union Fire Ins. Co. of
Pittsburgh, PA., 361 Fed. Appx. 986, 987 (11th Cir. 2010);
Emotional distress damages are available where an insurer fails to pay in a timely fashion.
Time Ins. Co., Inc. v. Burger, 712 So. 2d 389 (Fla. 1998). The insured bears the burden of proving
the following:
“(1) that the bad-faith conduct resulted in the insured’s failure to receive necessary or
timely health care benefits;
(2) that, based upon a reasonable medical probability, this failure caused or aggravated
the insured’s medical or psychiatric condition; and
(3) that the insured suffered mental distress related to the condition or the aggravation
of the condition.”
Id. at 393.
Attorneys fees are available for first party claimants under statute. Fla. Stat. §627.248
Punitive damages are not available at common law. Fortune Ins. Co. v. Fernandez, 560 So. 2d
239 (Fla. Dist. Ct. App. 1990). allows punitives for acts occurring with such frequency as to
indicate a “general business practice” including:
(a) Willful, wanton, and malicious;
(b) In reckless disregard for the rights of any insured; or
(c) In reckless disregard for the rights of a beneficiary under a life insurance contract.
Fla. Stat. § 624.155(5).

http://uphelp.org/sites/default/files/publications/Final%20-%20Bad%20Faith%20Survey.pdf

Cited: United Policyholders and Advocacy and Action Programs

50 State Survey of Bad Faith Laws and Remedies
October 23, 2014