What happens if an insurance company fails to act in good faith?

If an insurance company fails to act in good faith on a claim in Florida, the policyholder can file a breach of contract lawsuit. This type of lawsuit seeks compensation for any damages the policyholder suffered as a result of the insurance company’s bad faith. Examples of bad faith include refusing to investigate a claim, refusing to pay a claim, or unreasonable delay in settling a claim. In Florida, the law requires insurance companies to act in good faith when processing and settling claims. This includes making a reasonable effort to investigate the claim, thoroughly and fairly evaluating the claim and promptly responding to and resolving the claim. Courts in Florida have also held that an insurer must make a reasonable effort to settle a claim if the liability of the insured is reasonably clear. If an insured can prove that the insurance company acted in bad faith, the court may award them damages, including economic losses (such as medical bills or repair costs), non-economic losses (e.g., emotional distress), and punitive damages to punish the insurer for its misconduct. In addition to award damages, the court can also order the insurer to cover the attorney fees the insured incurred in bringing the suit.

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What happens if an insurance company fails to act in good faith?

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