When are you allowed to pursue an UNFAIR CLAIMS (BAD FAITH) action against an insurance company?

When are you allowed to pursue an UNFAIR CLAIMS (BAD FAITH) action against an insurance company?

Florida Statute 626.954 (1)(i) and Florida Statute 626.954(1)(i)3 has spelled out the different situations that can constitute unfair settlement practices allowing an insured to sue.

1. Attempting to settle claims on the basis of an application, when serving as a binder or intended to become a part of the policy, or any other material document which was altered without notice to, or knowledge or consent of, the insured;

2. A material misrepresentation made to an insured or any other person having an interest in the proceeds payable under such contract or policy, for the purpose and with the intent of effecting settlement of such claims, loss, or damage under such contract or policy on less favorable terms than those provided in, and contemplated by, such contract or policy; or

3. Committing or performing with such frequency as to indicate a general business practice any of the following:
a. Failing to adopt and implement standards for the proper investigation of claims;
b. Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue;
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.

As far as seeking punitive damages from the insurer, the plaintiff must prove that the cause of action is a general business practice of the insurer. These can be difficult to prove without specific occurrences. However, a single occurrence can give rise to a bad faith claim not involving punitive damages. Overstreet v. Ty-Tan, Inc., 48 So.2d 158 (Fla. 1950). To pursue a bad faith claim, your Palm Beach County accident attorney shall give written notice to the insurer and the Department of Financial Services, wherefore the insurer has 60 days to correct the violation.