Florida Bad Faith Insurance Claims: What Damages are Available?
Companies that offer property insurance policies in Florida have a legal duty to treat their policyholders fairly. This is because Florida has a good faith requirement for handling insurance claims. When a company violates its good faith obligations, it can cause major headaches and financial damage to victimized policyholders. Companies must be held accountable for any bad faith conduct.
The Categories of Damages
Under Florida law, policyholders that have been affected by bad faith practices are entitled to recover compensation for all damages that reasonably stem from the bad faith violation. Typically, recoverable compensation fits into one of four categories:
- The value of your initial claim: A bad faith claim will arise out of the insurance company’s improper handling of an underlying insurance claim. In many of these cases, the original claim was entirely valid and it should have been paid out in a timely manner. If you made a valid property damage claim, and it was denied in bad faith, you are still entitled to recover for your original claim.
- Recovery for consequential costs: If you incurred additional costs that you would not have incurred but for the insurance company’s unjust delay or claim denial, those costs that became necessary as a result of the insurer’s bad faith actions can be recovered. Under Florida law, this includes court costs and reasonable attorneys’ fees if you had to pay out those legal expenses because of the company’s bad faith.
- Compensation for emotional distress: In some cases, you may be able to recover compensation for emotional damages. This is well demonstrated in the Florida Supreme Court case Butchikas v. Travelers Indemnity Company. This requires that a policyholder must prove that the emotional damage was sustained as a direct result of a company’s bad faith claims practices. The concept is very similar to the recovering for consequential costs. If the emotional distress only occurs due to the insurance company’s bad faith, the insurance company must be responsible.
- Punitive Damages: Finally, bad faith insurance lawsuits can sometimes lead to punitive damages. Unlike the other categories of damages, the purpose of punitive damages is not to compensate you for your loss. Instead, punitive damages are meant to punish the bad actions of the defendant. These penalties help discourage insurance companies from committing similar bad conduct in the future. While punitive damages are meant to punish the company, the compensation still goes to the injured policyholder. Florida’s Insurance Code allows for the recovery of punitive damage only when a company’s bad faith actions were either willful and malicious or reckless towards the rights of the policyholder, or was conducted with such frequency to be determined a pattern and practice.
Do You Have a Bad Faith Insurance Claim?
Your property insurance claim deserves fair treatment from the insurance company. If you believe that the insurance company has been delaying your claim, has failed to properly investigate your claim, has failed to offer you a reasonable settlement, or has mistreated you in any other way, our team can help. At Geyer Fuxa Tyler, our attorneys have extensive experience handling bad faith insurance claims in Florida. Contact our office today at (954) 990-5251 to schedule your free initial consultation.