When Can You Sue a Home Insurance Company in Florida?
Florida homeowners pay for their homeowners insurance policies, expecting to be compensated for covered losses if they occur. However, insurance companies don’t always cover claims when they should. Fortunately, Florida law allows homeowners to sue their insurance company for denying a claim. Filing a lawsuit against your insurance company may be appropriate if you have exhausted the appeals or complaint processes.
What Constitutes Bad Faith by a Home Insurance Company?
In Florida, bad faith by a home insurance company means unfair or unreasonable actions that violate the insurer’s duty to act honestly and fairly toward policyholders. Under Florida Statute § 624.155, you can sue for bad faith when your insurer mishandles a claim in ways that prioritize its interests over your rights.
Common reasons for bad faith insurance practices and lawsuits include:
Unreasonable Denial of a Valid Claim
Bad faith occurs when your insurer denies a claim that is covered under the policy without a legitimate reason stated in your policy. For example, if your policy covers hail damage from a hurricane but the insurer denies the claim by falsely attributing the damage to a non-covered cause, this could be considered an act of bad faith.
The insurer must provide a reasonable explanation for the denial of your claim, supported by evidence and relevant policy terms. Denying a claim without proper investigation or misrepresenting policy coverage to avoid payment is a sign of bad faith.
Failure to Properly Investigate
Your home insurance company is required to conduct a thorough and timely investigation of claims. Bad faith may arise if your insurer fails to investigate adequately, ignores evidence you provide, or relies on biased adjusters to undervalue or deny your claim.
For instance, if your homeowners’ insurance company dismisses your claim without inspecting your property or delays the investigation unnecessarily, causing you financial hardship, this could constitute bad faith insurance practices under state law.
Unreasonable Delay in Processing or Payment
Delaying claims processing or payment of a valid claim without justification is another type of bad faith. Florida law expects insurers to act promptly. If your insurance company drags out the claims process, such as by repeatedly requesting unnecessary documents, failing to respond to your communications, or stalling on settlement offers, this could be grounds for a bad faith lawsuit. Delays that cause additional harm, like preventing home repairs that lead to further property damage, strengthen such cases.
Lowballing or Underpaying Claims
Offering a settlement far below the reasonable value of your claim, without a valid explanation, can also be bad faith. For example, if your home sustains $150,000 in covered damage but the insurer offers $40,000 based on an inaccurate or incomplete assessment, this could be considered an act of bad faith. Insurance companies must provide fair and accurate valuations based on evidence, rather than manipulating estimates to minimize payouts.
Misrepresentation or Deceptive Practices
Bad faith includes misrepresenting policy terms or misleading you about your coverage to avoid paying a damage claim. If your insurer claims your policy doesn’t cover certain damages when it does, or if they provide false information to discourage you from pursuing a claim, this violates Florida’s bad faith laws.
Understanding Your Florida Homeowners Insurance Policy
Understanding your Florida homeowners’ insurance policy is crucial for ensuring you have sufficient protection and are prepared to handle claims, particularly since Florida is prone to flooding and hurricanes. A homeowner’s insurance policy is a contract that outlines the coverage, exclusions, and responsibilities of both the homeowner and the insurance company.
Ensure that you review the declarations and exclusions sections to understand what is covered. For example, an insurance policy may list specific perils that are covered, such as hurricanes, lightning, or hail, but exclusions are equally important.
Standard exclusions include flooding, mold, wear and tear, and earth movement. Hurricane damage is typically covered, but policies often have a separate, higher deductible (2-5% of the home’s insured value) for hurricane-related claims.
Your policy documents outline your responsibilities following a loss, including promptly reporting the damage, mitigating further loss, and providing documentation of the damage. Insurers are required to investigate and respond within specific timeframes under Florida law, typically 30 days to respond to a claim and 90 days to either pay or deny it. Understanding these timelines helps you hold your insurance company accountable. If a claim is denied, review the denial letter and policy to determine whether the insurer’s reasoning is sound.
Steps to Take Before Filing a Lawsuit
Before filing a lawsuit against your homeowners insurance company in Florida for a denied claim, it’s smart to exhaust all non-litigation options to resolve the dispute efficiently and cost-effectively. Lawsuits are time-consuming and expensive, so taking strategic steps beforehand increases your chances of a favorable outcome without the court getting involved:
Review the Denial Letter and Your Policy
Examine your insurance company’s denial letter. It should state why the claim was denied, such as policy exclusion or lack of evidence. Check your policy to see if the denial aligns with your terms of coverage and exclusions. For instance, if the insurer states your hurricane damage was from flooding, but your photos suggest wind damage, you could have grounds to refute the denial.
Collect Evidence
Collect all relevant documentation to support your homeowners’ claim. This includes photos or videos of the damage, repair estimates, receipts for temporary repairs, and any correspondence with the insurer. Create a timeline of events, including the date of the damage, the date you reported it, and all interactions with the insurer. In Florida, where hurricane and water damage claims are common, evidence such as weather reports or expert assessments can help prove the cause of the damage.
File Appeal
Contact your insurance provider to file a formal appeal, as most policies outline an appeal process. Submit a written appeal with your evidence, clearly explaining why the denial is incorrect based on your policy’s coverage. Be polite but firm, and keep records of all communications. Insurers may reverse denials if presented with compelling evidence or if they realize the denial was made in error. In Florida, insurers must acknowledge your appeal promptly, usually within 30 days.
Hire a Public Adjuster
Consider hiring a licensed public adjuster, especially for complex or high-value claims, such as those involving hurricane damage. Public adjusters are professionals who assess your loss independently and negotiate with the insurer on your behalf. They can identify underpaid or improperly denied claims and provide expert documentation to strengthen your case.
In Florida, where insurers often dispute the cause or extent of damage, a public adjuster’s opinion can be invaluable. Note that adjusters typically charge a fee, so weigh the cost against the potential benefits.
The Legal Process for Suing an Insurance Company in Florida
Suing your homeowners’ insurance company for denying or underpaying a claim is complex. The process is:
Evaluate Claim And Hire An Insurance Attorney
Before initiating your denied claim lawsuit, assess whether you have a viable case by reviewing the insurer’s denial letter and your homeowners policy. Common grounds for suing include wrongful denial of a covered claim, bad faith practices (e.g., unreasonable delays, lowball offers, or failure to investigate), or breach of contract (failing to honor policy terms). Consult an experienced Florida insurance attorney, preferably one handling homeowners’ claims, to evaluate your case. Many offer free consultations and work on a contingency basis, meaning they’re paid only if you win.
File a Civil Remedy Notice (CRN) for Bad Faith Claims
If you’re suing for bad faith under Florida Statute § 624.155, you must first file a Civil Remedy Notice (CRN) with the Florida Department of Financial Services (DFS). The CRN notifies the insurer of your intent to sue for bad faith practices, such as unreasonable denial, delay, or underpayment of a claim.
It must include specific details, such as the insurer’s name, your policy number, the claim number, the alleged violation, and how the insurer can resolve the issue. You can file the CRN online via the DFS website or by mail. Once filed, the insurer has 60 days to “cure” the violation by paying the claim or correcting the issue. If they fail to do so, you can proceed with a bad-faith lawsuit. Hiring a skilled insurance attorney is vital to ensure your CRN is drafted correctly.
Exhaust Every Pre-Litigation Option
Before filing your lawsuit, ensure you’ve exhausted non-litigation remedies, as courts may expect this, and it strengthens your case. These options include appealing the denial to the insurer, hiring a public adjuster to reassess the claim, filing a complaint with the DFS for mediation, or pursuing appraisal or mediation as outlined in your policy.
Document all interactions with your insurance company, including emails, letters, and phone calls, as they may serve as evidence of the insurer’s misconduct. Florida’s 2023 insurance reforms make bad faith lawsuits more complicated by requiring proof of more than “mere negligence.” Thus, thorough documentation of the insurer’s actions is essential to demonstrate intentional or reckless behavior.
File the Lawsuit in Court
If pre-litigation efforts don’t bear fruit, your attorney will file a lawsuit in a Florida court, typically a circuit court for claims exceeding $30,000 or a county court for smaller claims. The lawsuit will specify the legal claims, such as breach of contract or breach of the duty of good faith and fair dealing.
The complaint must detail the facts of your case, including the damage, the claim submission, the denial, and how the insurer violated the policy or Florida law. You’ll need to serve the insurer with the lawsuit, notifying them of the legal action. The insurance company will respond with an answer, admitting or denying your allegations, and may file motions to dismiss if they believe the case lacks merit. Your insurance attorney will handle these procedural steps to ensure compliance with Florida’s court rules.
Most insurance lawsuits in Florida settle out of court because a lawsuit is costly for both parties. Your attorney will try to negotiate or mediate a settlement. If you’re offered a settlement, your lawyer will advise you on whether it’s fair.
What Damages Can You Recover in a Bad Faith Insurance Lawsuit?
In Florida, a bad faith insurance lawsuit against a homeowners insurance company allows you to recover various types of damages when the insurer unreasonably denies, delays, or underpays a valid claim in violation of Florida law. Possible compensation includes:
- Compensatory damages for the claim amount
- Consequential damages for additional financial losses
- Interest on delayed payment
- Punitive damages for reckless bad faith, if appropriate
- Attorney and court fees
- Emotional distress, if appropriate
Why Hire a Florida Property Insurance Lawyer
Hiring an insurance lawyer is vital if your insurance company wrongly denied your claim or paid less than you deserve. Retain our experienced homeowner insurance claim lawyer at Kennon Law. Our skilled legal counsel has successfully litigated many bad faith insurance claims and knows what it takes to construct a strong case. Contact Kennon Law today for a confidential legal consultation at (888) 878-4267.
