You buy insurance for your home, your automobile, and other property that you wish to protect. You also buy insurance so that in the event you are negligent or careless and cause injury or damage to someone, you will be protected from having to pay money out of your own pocket. The insurance company must stand in your shoes and pay out any settlement or judgment amount. But what happens if your insurance company fails to settle a claim when it has the ability to do so and it is clear that it should do so in order to protect you from greater losses? If your insurer fails to promptly settle a claim when it could have and should have done so in order to protect your interests and you have suffered damages as a result, then you may have a claim against your insurance company for its “bad faith refusal to settle” the claim.
Under Florida law, every insurance company issuing policies in this state has a duty to act in good faith when negotiating claims on behalf of its policyholders. In other words, an insurance company must act fairly and reasonably to protect you if and when it has the opportunity to do so. For example, if you are struck and severely injured by a hit and run drunk driver, you have the ability to make a claim under your own uninsured motorist insurance policy. If you provide your insurance company with proof that the value of your claim exceeds the limits of your coverage, yet your insurer refuses to settle the claim for the policy limits amount, it may be acting in bad faith. If so, the insurance company could subsequently be held responsible to pay the full amount of a judgment, including attorney fees. Additionally, the insurer could be held liable to pay punitive damages. Of course, this is only one example of a bad faith refusal to settle scenario. If you believe that an insurance company may be acting in bad faith and refusing to settle an insurance claim, speak with an experienced lawyer as soon as possible. Under Florida law, time limitations known as the “statute of limitations” govern these claims, and the failure to file a claim in a timely manner could cause you to lose the right to pursue the claim altogether.