What is an insurance company’s duty to act in good faith?

Under Florida law, insurance companies have a duty to act in good faith when it comes to dealing with their customers. This is known as the "implied covenant of good faith and fair dealing". This means that insurance companies must make decisions that are in the best interests of their customers. Insurance companies must also use reasonable care when they make decisions, investigate claims, and pay out benefits. The insurance company must investigate any claims to determine if they are valid and make fair and prompt decisions. The insurance company has an obligation to provide a prompt and clear explanation of all decisions they make so their customers can understand the reasoning behind the decision. The insurance company must also make sure they are not taking advantage of their customers when it comes to premium payments or policy changes. This means that they must give their customers reasonable notice when they make policy changes or premium adjustments. The insurance company must also make sure they are not misrepresenting any information to their customers. For instance, they cannot misrepresent information about the policy, the coverage provided, or the cost of coverage. If an insurance company fails to meet the implied covenant of good faith and fair dealing, then they may be in violation of the law and subject to penalties or fines. Therefore, it is important for insurance companies to act with the best interest of their customers in mind.

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What is an insurance company’s duty to act in good faith?

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