Florida Legislator Proposes Legislation Removing Consumers’ Ability to Sue Insurance Companies for Bad Faith in Court
Florida Legislator Proposes Legislation Removing Consumers’ Ability to Sue Insurance Companies for Bad Faith in Court May 16, 2019 Proposed changes to the law in Florida could ultimately affect the ability for policyholders to hold their insurance companies accountable in terms of delaying or failing to settle claims, including those related to hurricane relief. A bill recently submitted to the legislature would make a number of changes that would cripple the ability for the consumer to go after their insurance company in the face of bad faith behavior, including taking the claim away from a jury and placing it into the hands of an administrative judge and denying the consumer the right to discovery, which would effectively leave them without any evidence, and without a case. Current State of “Bad Faith Insurance Law” in Florida Florida imposes what’s known as a “duty of good faith” when it comes to settling a claim with the insured or a third party, which means acting “fairly and honestly” towards its insured with regard to their interest. This means that the insurer cannot expose the insured to increased liability by failing to settle any claims against the insured, nor can they harm a third party to the insurance contract by failing to settle a claim. An insurer also owes two major contractual duties to the insured—the duty to indemnify (payment on a valid claim)—and to defend against any third party lawsuits brought against the insured in court. In other words, the insurer owes a fiduciary duty, whereby they cannot act on the sole basis of its own interests when it comes to negotiating claims. If the insurer does not attempt to negotiate in good faith, a bad faith claim can currently be filed against them. In deciding on the claim, a court focuses on the insurer’s conduct; and while a failure to settle does not necessarily constitute “bad faith,” the insurer must initiate settlement negotiations and, if it fails to reach a settlement, it has the burden of demonstrating that it did so because there was “no realistic possibility of settlement within policy limits.” Ultimately, the court relies on the “totality of circumstances” standard and makes its determination on a case-by-case basis. The courts have established a strong precedent that determining whether or not an insurer has acted in good faith is a question for the jury, not the court. How That Would Change The proposed legislation would effectively undo this case law and mandate that anyone claiming a violation of an insurer’s duty of good faith would have to file an administrative complaint with the Department of Financial Services, which would first determine “the sufficiency of complaints.” If the department determines that the complaint does not meet very specific requirements, that complaint would automatically be dismissed. Contact our Florida Insurance Claim Attorneys to Find Out More If you have questions regarding exposure to bad faith or extra contractual liability, contact our Florida insurance attorneys at HD Law Partners today to find out more about our services. Resources: flsenate.gov/Session/Bill/2019/751/BillText/c1/PDF wfla.com/8-on-your-side/investigations/change-in-insurance-law-would-take-away-consumers-day-in-court/1851917864 http://A Look at Hurricane Michael’s Damage in Florida & New Rules for Insurance Companies Posted in Hurricane Insurance | No Comments » Connect with us Archives May 2026 April 2026 March 2026 February 2026 January 2026 December 2025 November 2025 October 2025 September 2025 July 2025 June 2025 January 2025 January 2024 December 2023 November 2023 October 2023 September 2023 August 2023 July 2023 June 2023 May 2023 April 2023 March 2023 February 2023 January 2023 December 2022 November 2022 October 2022 September 2022 August 2022 July 2022 May 2022 April 2022 March 2022 November 2021 October 2021 September 2021 August 2021 July 2021 May 2021 April 2021 March 2021 February 2021 January 2021 December 2020 November 2020 October 2020 August 2020 July 2020 June 2020 May 2020 April 2020 March 2020 February 2020 January 2020 December 2019 November 2019 October 2019 September 2019 August 2019 July 2019 June 2019 May 2019 April 2019 March 2019 February 2019 January 2019 December 2018 November 2018 October 2018 September 2018 August 2018 July 2018 June 2018 May 2018 April 2018 March 2018 February 2018 January 2018 December 2017 November 2017 October 2017 September 2017 August 2017 July 2017 June 2017 May 2017 April 2017 March 2017 February 2017 January 2017 December 2016 November 2016 October 2016 November 13 Categories Alimony Appellate Arbitration Auto Accidents Auto Insurance Business Corporate Business Insurance Law Child Custody Child Support Criminal Law Divorce Family Law FEMA Insurance Payments Florida’s Mandatory 2‑Hour Legal Professionalism CLE: Foreclosure Defense Fort Myers Hurricane Insurance Attorney General Guardianship HD Law Partners Service HOA/Property Management Homeowners Association Homeowners Insurance Hurricane Claims Hurricane Insurance Insurance Bad Faith Insurance Claims Insurance Defense Insurance Litigation Landlord Tenant Law Enforcement Liability Loan Modifications Mold Water Damage Parental Rights Paternity Personal Injury Premises Liability Law Prenuptial Agreements Private Security Property Distribution Property Owner Law Sarasota Insurance Litigation Attorney Slip Fall Tampa Business and Corporate Attorneys tampa family attorney Tampa Insurance Attorneys Timeshare Timesharing Uncategorized HD Law Partners is proud to be your trusted full-service law firm Quick Links Property & Casualty Business & Corporate Litigation Family Law Contact Us Careers Get In Touch 2002 North Lois Avenue Suite 510 Tampa, FL 33607 813-253-5333 Contact Us