Florida Bad Faith Insurance Overview
When your insurance company fails to honor its obligations or perform some other responsibility as set forth in the terms of your insurance contract, you may have a case against your carrier for bad faith. A bad faith insurance case will only arise from a dispute between you and your own insurance company. Because no contract exists between you and the company providing insurance for another driver, it is not a bad faith claim if the other driver’s insurance company refuses to pay you after an accident. The fundamental issue of every “bad faith” suit is the insurance company’s breach of the contract that exists between it and the person insured under the policy. Bad faith can occur with all kinds of insurance - from health and dental to automobile and homeowner’s - and there are many different ways in which an insurance company might act in bad faith.
Every insurance contract contains what is referred to as either a covenant or a promise of good faith and fair dealing, whether it is literally written out or merely implied. This covenant is imposed upon all insurance companies to help ensure that they will always be fair and honest when handling the claims of their customers. An insurance carrier has the responsibility to meet the reasonable expectations of those it insures, and must always, when handling a claim, consider both the financial interests of its customers and its own financial interests equally. The covenant of good faith and fair dealing places that responsibility directly into insurance contracts.
Insurance companies have lawyers with years of legal experience who write their contracts, update them as the law is shaped by new appellate court decisions, and litigate the terms of the contracts in court when necessary. The wording that appears in an insurance policy might seem to be written in plain and simple English, but the terminology’s statutory origin or interpretation by a judge may give it a meaning that is unfamiliar to consumers. Insurance companies make it their business to know the legally-accepted definitions of standard policy terms in order to ensure that their contracts are drafted with the language that will be most advantageous to them.
Although you purchase insurance to protect yourself and your financial interests, your insurance company is a business, with making a profit as its primary motivation. You might think that because it insures you, your carrier is always on your side and will always act in your best interests. This ought to be the case, and the law attempts to ensure that it will be through the covenant of good faith and fair dealing, but your insurance company exists to make a profit and it is for this reason that it will sometimes attempt to act outside of the law, in bad faith.
The insurance industry is not regulated at the federal level, which means that it is up to the Department of Insurance in each individual state to oversee how insurance companies do business and treat consumers in their state. The absence of federal standards and oversight make it much easier for insurance giants to create loopholes for themselves and to act outside of the law. In addition, most consumers do not know or understand enough about their policies and typically believe that because insurance companies are so big and have so much money to defend themselves that any attempts to stand up to them will be futile. Unfortunately, insurance companies take advantage of this fact. They know that approximately 95% of all claims that they deny will simply go away because the insured does not believe it will do any good to fight. As for the remaining 5%, most will be satisfied by a low offer because that appears to be better than the denial that was originally handed to them. If the remaining 1% litigates, chances are that the insured will prevail, but the insurance company has still saved money because it managed to make low payments on a few claims and avoid payment all together on 95%.
The most recent statistics indicate that in property and casualty alone, insurance companies make over $73 billion dollars in profits annually. While this number has continued to rise, the number of claims they pay has fallen to only about 55% of all claims submitted. If your insurance company is refusing to pay your claim, or does not appear to be cooperative in the handling of your claim, it is not necessarily acting in bad faith. However, with huge profits to motivate it and a great likelihood that you will not do anything about a denied claim, your carrier may think it has nothing to lose. If you think that your insurer may be acting in bad faith, it is important to make sure that you understand the terms of your policy and be informed before you are willing to accept a denial, reduction, or delay of payment.
The Bad Faith Insurance information offered by the greater Tampa Bay area Bad Faith Insurance Lawyers and contained herein, regarding Florida Bad Faith Insurance statutes and Pasco, Pinellas, and Hillsborough County, Florida Insurance Dispute claimants' rights, is general in scope. No denied Insurance Claim attorney / client relationship with our greater Tampa Bay area Insurance Bad Faith attorneys is hereby formed nor is the information herein intended as formal legal advice. See terms of use. Please contact the greater Tampa Bay area Insurance Dispute Lawyers toll-free at 1-800-4-INJURY regarding your specific claim if your insurance claim was denied in Dade City, City of New Port Richey, City of Port Richey, City of San Antonio, Town of St. Leo, Zephyrhills, Bayonet Point, Beacon Square, Blanton, Crystal Springs, Dade City North, Elfers, Holiday, Hudson, Jasmine Estates, Lacoochee, Land O' Lakes, New Port Richey East, Odessa, Saint Joseph, Shady Hills, Trinity, Wesley Chapel, Wesley Chapel South, Zephyrhills North, Zephyrhills South, Zephyrhills West, Belleair, Belleair Beach, Belleair Bluffs, Belleair Shore, Clearwater, Dunedin, Gulfport, Indian Rocks Beach, Indian Shores, Kenneth City, Largo, Madeira Beach, North Redington Beach, Oldsmar, Pinellas Park, Redington Beach, Redington Shores, Safety Harbor, Seminole, South Pasadena, Pete Beach, St. Petersburg, Tarpon Springs and Treasure Island, Florida. |
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