Insurance Bad Faith Claims in Sarasota, FL

Insurance Bad Faith Claims in Sarasota, FL

When you file an insurance claim after a serious accident, illness, or property loss, you expect your insurer to handle it fairly and promptly. Florida law requires exactly that. But insurers sometimes delay, underpay, or outright deny valid claims — conduct that crosses the line from a business dispute into insurance bad faith. In Sarasota and throughout Florida, policyholders have powerful legal tools to hold insurers accountable.

What Is Insurance Bad Faith Under Florida Law?

Florida recognizes two distinct types of bad faith claims. First-party bad faith arises when your own insurer fails to settle your claim fairly — for example, your homeowner's insurer lowballs a hurricane damage claim or your health insurer wrongly denies a covered procedure. Third-party bad faith occurs when a liability insurer fails to settle a claim against its policyholder within policy limits, exposing that policyholder to an excess judgment.

Florida's bad faith statute, Section 624.155, Florida Statutes, establishes the framework for first-party claims against insurers. It requires insurers to attempt in good faith to settle claims when, under all the circumstances, it could and should have done so. Courts have interpreted this broadly to cover a range of insurer misconduct, including unreasonable delays, inadequate investigations, and misrepresentations about policy coverage.

Florida also recognizes common law bad faith, which applies primarily to third-party liability situations under the standard established in Berges v. Infinity Insurance Co. and its progeny. The Florida Supreme Court has consistently held that insurers must give equal consideration to the interests of their insured when deciding whether to settle within policy limits.

Common Examples of Bad Faith Conduct in Sarasota

Insurance bad faith takes many forms. Sarasota residents frequently encounter the following insurer behaviors that may support a bad faith claim:

• Unreasonable claim delays: Florida law requires insurers to acknowledge claims within 14 days and pay or deny within 90 days. Repeatedly requesting unnecessary documentation or simply sitting on a claim without explanation violates these standards.
• Inadequate investigation: An insurer that refuses to hire a qualified adjuster, ignores expert reports, or fails to inspect damaged property before issuing a denial has not met its duty to investigate thoroughly.
• Lowball settlement offers: Offering a fraction of a claim's fair value without a credible basis, particularly after being presented with clear evidence of damages, is a hallmark of bad faith.
• Misrepresenting policy terms: Telling a policyholder that coverage does not exist when it clearly does — or applying exclusions that do not apply — constitutes a material misrepresentation that can support a bad faith action.
• Failure to settle third-party claims within policy limits: If a Sarasota driver carries $100,000 in auto liability coverage and the insurer refuses a reasonable $90,000 settlement demand, then a jury returns a $500,000 verdict, the insurer may be liable for the entire excess judgment.

The Civil Remedy Notice Requirement

Before filing a first-party bad faith lawsuit under Section 624.155, Florida law imposes a critical procedural step: you must file a Civil Remedy Notice (CRN) with the Florida Department of Financial Services and serve a copy on the insurer. The CRN must specifically identify the insurer's conduct, the policy provisions violated, and the damages you claim.

Once the CRN is filed, the insurer has 60 days to cure the alleged violation by paying the claimed amount or otherwise correcting the conduct. If the insurer cures within that period, the bad faith claim is extinguished. If it does not, you may proceed to file suit. Missing this step — or filing an insufficiently detailed CRN — can doom an otherwise meritorious bad faith claim, which is why early consultation with an experienced Florida insurance attorney is essential.

Third-party bad faith claims under Florida common law do not require a CRN. They typically arise after a liability judgment has been entered against the insured in excess of policy limits, at which point the insured (or a judgment creditor who has been assigned the claim) may pursue the insurer directly.

Damages Available in Florida Bad Faith Cases

Florida's bad faith framework allows for recovery well beyond the original insurance benefit that was wrongfully withheld. In a successful bad faith action, you may recover:

• The full amount of the underlying insurance claim, including any amounts the insurer should have paid;
• Consequential damages — financial losses that flowed directly from the insurer's bad faith, such as foreclosure on a home caused by an unpaid property claim;
• Attorneys' fees and costs under Section 627.428, Florida Statutes, which allows fee-shifting against insurers in most coverage disputes; and
• In egregious cases, punitive damages where the insurer's conduct was fraudulent, malicious, or demonstrated a reckless disregard for the policyholder's rights.

The availability of consequential and punitive damages is what makes bad faith litigation qualitatively different from an ordinary coverage dispute. An insurer that denies a $200,000 property claim in bad faith may ultimately face liability several times that amount.

Steps to Take If You Suspect Bad Faith in Sarasota

Documenting insurer conduct from the beginning of your claim is critical. Start by keeping a detailed log of every phone call, email, and letter — noting dates, the names of representatives you spoke with, and exactly what was said. Save all written correspondence and any inspection reports or estimates provided by the insurer.

If your insurer is delaying without explanation, send written demands referencing Florida's statutory timeframes and request a specific written explanation for any delay. If coverage is denied, ask for the specific policy language and exclusions the insurer is relying upon. Vague or shifting denial rationales are red flags that may support a bad faith finding.

Sarasota policyholders should be aware that Florida's Assignment of Benefits (AOB) rules have evolved in recent years following legislative reform, and some contractors or service providers may attempt to pursue claims in their own name. Understanding who controls your claim and your rights in that process is important before signing any assignment agreements.

Retain an independent adjuster or engineer to document your damages independently of the insurer's evaluation. Objective, third-party documentation often proves essential in both the underlying coverage dispute and any subsequent bad faith litigation.

Finally, consult a Florida insurance bad faith attorney before accepting any settlement or signing any releases. A release of the underlying claim may — if not carefully drafted — also release any bad faith claim you have accrued, particularly if the release language is broad. An experienced attorney can identify whether bad faith conduct has occurred and preserve your rights before they are inadvertently waived.

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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