You Can Initiate a Bad Faith Claim After Receiving an Appraisal Award

Under Florida law, property insurance companies have a legal obligation to settle claims using good faith business practices. If they fail to live up to that obligation, they can be held liable for bad faith damages. If you have been a victim of bad faith, you need to bring a claim on that issue immediately. You may be able to bring one after receiving an arbitration or appraisal award. Here, our Fort Lauderdale bad faith insurance attorneys discuss an important Florida appeals court case that addresses this issue.

Bad Faith After Appraisal

Case Background

In the case of Terry Hunt v. State Farm Florida Insurance Company, the Florida Second District Court of Appeal issued an extremely important decision, clarifying a policyholder’s right to initiate a bad faith claim. In this case, Mr. Hunt was seeking compensation from his insurer after his home sustained serious sinkhole damage. State Farm sent out a representative to appraise the value of the loss. However, Mr. Hunt disagreed with State Farm’s appraisal, finding the amount to be unreasonably low. He filed a claim against the insurer, and then after 60 days passed, and nothing changed, he filed a bad faith claim as well, arguing that State Farm was unreasonably delaying settling.

Prevailing in the Underlying Dispute

Under Florida law, you can only obtain bad faith damages if you ‘prevail on the underlying dispute’. Essentially, this means that you have to actually win your contractual case to get bad faith damages. Of course, this makes some sense on a basic level. If the insurance company did not owe you any money under the policy, then you probably were not damaged by their decision not you offer you a settlement. Still, before this case was decided, there were serious questions over what it meant to ‘prevail’. More specifically, many insurance companies argued that a policyholder getting an appraisal award was not enough to seek bad faith damages.

The Decision

After a drawn out battle through the courts, the Second District Court of Appeal reversed a lower court decision that disallowed Mr. Hunt’s bad faith claim. Contrary to the view of insurance companies, getting an appraisal award is sufficient to initiate a bad faith claim. Of course, that does not mean that the insured party will win the bad faith case, but they are allowed to bring the issue before that court. This case was a big win for policyholders in the state. It gives all home and business owners a sharper legal tool to take on bad-acting insurance companies.

Was Your Property Insurance Claim Denied?

The Fort Lauderdale property insurance dispute lawyers at Geyer Fuxa Tyler can help. We have extensive experience handling all types of claims, including bad faith claims. Further. we take cases on a contingency fee basis, meaning there are no up-front out-of-pocket costs for you. To find out more about what we can do for you, please call our team today at 954-990-5251 to request a free review of your case.

Resource:

2dca.org/opinions/Opinion_Pages/Opinion_Pages_2013/April/April%2005,%202013/2D11-6484.pdf