Florida Law|car accident|out of state insurace|bad faith
Does Florida third party bad faith law apply to an out of state insurer? You Bet!

One interesting Issue that can arise in the context of a Florida car accident in Palm Beach County centers around the third party bad faith claims that can arise against the drivers who cases injury to a victim the car crash. That issue is what if the insurer is an out of state insurance company, and the insurance contract is then also considered an out of state insurance contract, does Florida third party bad faith law still apply? You bet it does!

This means that the doctrine of lex loci contractus (this is a legal doctrine which states the law of the location of contract will apply) is not the appropriate legal doctrine to apply to the a car accident third party bad faith case in deciding if Florida bad faith law would apply to the victims claim if he has a prevailing excess judgment verdict in Court.
The following case sets out the rule:

311 So.2d 164?
District Court of Appeal of Florida, First District. GOVERNMENT EMPLOYEES INSURANCE COMPANY, Appellant, v. A. C. GROUNDS, Appellee. No. S-441. April 16, 1975. Rehearing Denied June 4, 1975.
“[4] Appellant also contends that the trial court erred in denying the defendant's motion to dismiss and motion for directed verdict based on the law of the State of Mississippi; that the contract of insurance between appellant and appellee was made in the State of Mississippi and matters bearing upon the interpretation and obligations of contracts are determined by the laws of the place where the contract is made; that under the law of Mississippi, there could be no recovery by appellee against appellant in this case. While this is an action growing out of a contract, it is not a contract action strictly speaking. It is a hybrid which has some of the aspects of a tort action and some aspects of an action ex contractu. In Thompson v. Commercial Union Insurance Company of New York, Fla.App.(1st), 267 So.2d 18, cert. den. 271 So.2d 461, this court said:

‘. . . Although the courts have labeled a claim for ‘bad faith’ in refusing to settle as a contract action, it possesses certain illegitimate characteristics. The ‘contract’ is one engrafted by the courts upon a detailed written instrument and labeled with such terms as ‘negligent refusal to settle’ and ‘bad faith’; thus to a great extent the action sounds in tort arising out of a contractual relationship.'
Since an excess judgment action, though bearing certain aspects of a suit upon a contract is, strictly speaking, not one, we find that the law of Florida is the correct law to be applied in this situation.”
Also bear in mind that the statutes of limitation for bad faith is four years as a tort not five years a contract would be. This reasoning would also apply to torts giving rise to third party bad faith in context other then auto accident injury litigation. For example a slip and fall as well as TBI case would fall under the same rule.