First-Party Bad Faith
In Florida, insurance companies are charged with a duty to act in “good faith” when handling liability claims. Simply stated, the law requires an insurance company to settle claims when they have an opportunity to do so.
Sadly, people injured in accidents are often vulnerable to an insurance company’s expertise and power. Insurance companies make money by taking in premium payments and by not paying claims. The formula is pretty simple. The result is that injured people and families suffer.
Bad Faith allows injured persons or families to recover more than the policy limits provided for in an insurance policy. To recover more than the policy limits, an insurance company must receive a set time in which they have an ample chance to settle a claim. If they fail to do so, it is possible to recover additional “extra-contractual” money from the insurance company through the help of an Orlando bad faith insurance claims lawyer.
Types of Bad Faith Insurance in Orlando
Bad Faith can be complicated in that there are two types of bad faith. Firstly, there is third-party bad faith. These types of claims can be based on statutory or on common law. This type of claim is simply when the insurance company for the person that hit you fails to timely settle your claim when they had a chance to. For example, John was riding his motorcycle when a car pulled out in front of him. The person that pulled out in front of him only has $10,000.00 in insurance to pay for John’s injuries, which include a broken hip and a right leg amputation below the knee.
John’s attorney sends a letter to the at-fault party’s insurance company demanding both the payment of the $10,000.00 plus additional information needed to investigate the claim. The letter gives the insurance company 30 days to pay the money and provide the information. If they fail to fully comply with this demand, the insurance company might be on the hook for unlimited money that could well exceed the policy limits of $10,000.00.
First-Party Bad Faith
“First-party bad faith” is the other type of Orlando bad faith. This type of claim can only be based on Florida Statutes and it does not exist in the common law. The creation of a bad faith claim occurs when an insureds own insurance company fails to timely settle your claim.
For example, Mark sustains injuries when his car was rear-ended by an uninsured driver. Mark purchased uninsured/underinsured motorist insurance from his insurance company with policy limits of $100,000.00 per person and $300,000.00 per accident. Mark’s injuries were severe enough to require surgery. This created a huge financial burden for Mark.
Mark’s attorney, sends Mark’s insurance company a demand. The attorney demanded that the insurance company pay Mark the $100,000.00 that he was entitled to under the insurance policy within 30 days. The insurance company failed to comply as it claims that all of Mark’s injuries preexisted this accident. Sam Dunaway then is required to file a Civil Remedy Notice as required by Florida Statute 624.155. Before the insured can get any money in a first-party case, the attorney must serve the insurance company with a civil remedy notice.
This civil remedy notice gives the insurance company notice of their violations in handling the case. Additionally, the notice affords another 60 days to pay the policy limits and to “cure” the bad faith. The opportunity claim “bad faith” only becomes available if the insurance company fails to settle the case within the 60 days window.
Contact Attorney Sam Dunaway if you have any questions regarding a potential Bad Faith Claim.