Insurance Bad Faith Claims in Pensacola, FL

When you pay insurance premiums month after month, you expect your insurer to honor its obligations when disaster strikes. Florida law imposes a legal duty on insurance companies to deal fairly and honestly with their policyholders. When an insurer deliberately delays, denies, or undervalues a legitimate claim without a reasonable basis, that conduct may constitute insurance bad faith — and Florida law gives policyholders powerful tools to fight back.

Pensacola residents face unique insurance challenges. Situated along the Gulf Coast, the area is routinely exposed to hurricanes, tropical storms, and flooding. Property damage claims are common, and so is insurer misconduct in handling them. Understanding your rights under Florida's bad faith statutes is the first step toward holding your insurance company accountable.

What Constitutes Insurance Bad Faith in Florida

Florida recognizes two distinct types of bad faith claims: first-party bad faith and third-party bad faith. First-party bad faith occurs when your own insurer fails to properly handle your claim — for example, when a homeowner's insurer unjustifiably refuses to pay for hurricane damage to your Pensacola home. Third-party bad faith involves a liability insurer's failure to settle a claim against its insured within policy limits, exposing that insured to an excess judgment.

Under Florida Statute § 624.155, an insurer acts in bad faith when it fails to attempt in good faith to settle claims when, under all the circumstances, it could and should have done so. Courts and regulators look at whether the insurer:

• Conducted a prompt, thorough, and objective investigation of the claim
• Communicated clearly and timely with the policyholder
• Attempted to settle the claim promptly once liability became reasonably clear
• Provided a reasonable explanation for any denial or partial payment
• Honored policy provisions without imposing unreasonable conditions

Conduct that falls short of these standards — such as hiring biased adjusters, fabricating exclusions, or stonewalling legitimate requests for documentation — can form the basis of a bad faith lawsuit.

The Civil Remedy Notice: Florida's Prerequisite Step

Before filing a bad faith lawsuit under § 624.155, Florida policyholders must file a Civil Remedy Notice (CRN) with the Florida Department of Financial Services and serve a copy on the insurer. This notice identifies the specific statutory violations and gives the insurer 60 days to cure the alleged bad faith conduct by paying the full amount owed on the claim.

This procedural requirement is critically important. Failing to file a proper CRN — or filing it prematurely before completing the underlying claim process — can bar your bad faith action entirely. Many Pensacola policyholders lose their right to pursue bad faith damages simply because they were unaware of this prerequisite. An experienced attorney can ensure the CRN is filed correctly and strategically, preserving your legal options.

If the insurer fails to cure within the 60-day window, the policyholder may proceed to file suit in Escambia County Circuit Court or the appropriate federal venue.

Damages Available in a Florida Bad Faith Case

One of the most significant aspects of Florida's bad faith framework is the scope of recoverable damages. Unlike a standard breach of contract claim — which typically limits recovery to the policy benefits owed — a successful bad faith claim can yield substantially more. Policyholders may recover:

• The full amount of the underlying claim, including any amounts the insurer wrongfully withheld
• Consequential damages flowing from the insurer's bad faith conduct, such as lost income or additional property deterioration caused by delayed repairs
• Attorney's fees and costs under Florida Statute § 627.428, which mandates fee-shifting against insurers who are found liable
• Extracontractual damages, which in some cases can significantly exceed the face value of the policy

In third-party bad faith cases involving bodily injury liability, damages can include the full amount of any excess judgment entered against the insured — even if that judgment far exceeds the policy limits. Florida courts have held insurers liable for millions of dollars in excess judgments when they failed to accept reasonable settlement offers within policy limits.

Common Bad Faith Tactics by Pensacola Insurers

After major weather events — and Pensacola has endured its share, including the devastating rains of April 2014 and repeated hurricane threats — insurers sometimes prioritize their financial interests over legitimate claim payments. Specific tactics that may signal bad faith include:

• Misrepresenting policy language to deny coverage that clearly applies
• Using low-ball estimates from preferred contractors while ignoring independent repair assessments
• Claiming wear-and-tear exclusions for storm damage that is plainly covered
• Requesting excessive, repetitive documentation to delay payment
• Failing to respond to claim correspondence within Florida's statutory timeframes
• Pressuring policyholders to accept inadequate settlements shortly after a loss

Florida law requires insurers to acknowledge claims within 14 days, begin investigation promptly, and pay or deny claims within 90 days under most circumstances. Violations of these deadlines, found in Florida Statute § 627.70131, can serve as evidence of bad faith conduct.

Steps to Take If You Suspect Bad Faith in Pensacola

If you believe your insurer is acting in bad faith, documenting everything is essential. Start building your case immediately by taking these steps:

• Keep detailed records of all communications with your insurer, including dates, names of representatives, and summaries of conversations
• Preserve all written correspondence, including emails, letters, denial notices, and claim forms
• Obtain independent estimates from licensed contractors or public adjusters to counter lowball assessments
• Request your complete claim file from the insurer, which Florida law entitles you to receive
• File a complaint with the Florida Department of Financial Services if you believe your insurer has violated statutory requirements
• Consult a bad faith attorney before accepting any settlement offer or signing any release

Time is a factor in these cases. Florida's statute of limitations for bad faith claims is generally five years for statutory bad faith under § 624.155, but the clock can start running in different ways depending on the facts of your case. Do not wait to seek legal advice.

Insurance companies have teams of lawyers and adjusters working to protect their bottom line. As a Pensacola policyholder, you deserve an advocate who understands Florida's complex insurance statutes and will fight to ensure you receive every dollar your policy entitles you to — and potentially more, when the insurer's conduct crosses the line into bad faith.

Need Help? If you have questions about your case, call or text 833-657-4812 for a free consultation with an experienced attorney.

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