Insurance Bad Faith Claims in Naples, Florida

Insurance Bad Faith Claims in Naples, Florida

When you file an insurance claim after a loss, you expect your insurer to handle it honestly and promptly. Florida law imposes that obligation on every insurance company operating in the state. When an insurer fails to meet that standard—denying valid claims without reason, dragging out investigations, or offering unreasonably low settlements—the conduct may rise to the level of insurance bad faith. In Naples and throughout Collier County, policyholders have powerful legal tools to hold insurers accountable.

What Constitutes Insurance Bad Faith Under Florida Law

Florida recognizes two distinct types of bad faith claims: first-party bad faith and third-party bad faith. First-party bad faith arises when your own insurer mishandles your claim—for example, when a homeowner's insurer unreasonably delays or denies a Hurricane Ian property damage claim. Third-party bad faith occurs when a liability insurer fails to protect its insured from an excess judgment by refusing a reasonable settlement demand within policy limits.

Florida Statutes Section 624.155 governs civil bad faith actions against insurers. Under this statute, 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 examine the totality of the insurer's conduct throughout the claims process, not just isolated decisions.

Common acts that support a bad faith claim in Florida include:

• Denying a claim without conducting a reasonable investigation
• Misrepresenting policy provisions or coverage terms
• Failing to acknowledge or respond to communications within a reasonable time
• Offering substantially less than the damages actually sustained
• Compelling the insured to initiate litigation to recover amounts clearly owed
• Failing to provide a written denial with the specific reasons for the denial

The Civil Remedy Notice: A Critical Prerequisite

Before filing a bad faith lawsuit in Florida, policyholders must follow a mandatory procedural step. Florida Statute §624.155 requires that you file a Civil Remedy Notice (CRN) with the Florida Department of Financial Services before pursuing a bad faith action in court. This notice must specify the insurer's conduct, the policy provisions involved, and the damages claimed.

Once the CRN is filed, the insurer has 60 days to cure the alleged violation—meaning it can pay the full amount owed and avoid a bad faith lawsuit. If the insurer cures the violation within that window, the bad faith claim is extinguished. If it does not cure, the policyholder may proceed to court.

This procedural requirement is strictly enforced. A premature lawsuit—filed before the CRN or before the 60-day window closes—will be dismissed. Given the complexity of these filings and the tight deadlines involved, retaining experienced legal counsel before submitting a CRN is essential. The notice itself must be precisely drafted to preserve all available theories of recovery.

Damages Available in a Florida Bad Faith Case

One reason bad faith litigation is so significant is the scope of damages available. Unlike a straightforward breach of contract claim, a successful bad faith action allows recovery well beyond the original policy limits. In Naples courts, a policyholder who prevails on a bad faith claim may recover:

• The full amount of the underlying judgment, even if it exceeds policy limits
• Consequential damages flowing from the insurer's misconduct
• Economic losses caused by the delay, such as additional living expenses or lost business income
• Attorney's fees and court costs under Florida Statute §627.428
• In egregious cases, punitive damages if the insurer's conduct was fraudulent, malicious, or grossly negligent

Florida Statute §627.428 is particularly important: it mandates that insurers pay the policyholder's attorney's fees whenever a judgment is entered against them. This fee-shifting provision levels the playing field against well-resourced insurance companies and enables policyholders to retain qualified attorneys without upfront costs.

Bad Faith Claims and Property Damage in Southwest Florida

Naples and the broader Southwest Florida region have seen a significant rise in bad faith litigation following Hurricanes Irma and Ian. Tens of thousands of property damage claims were filed across Collier County, and insurers faced enormous pressure to minimize payouts. Unfortunately, many policyholders experienced lowball estimates, unjustified scope limitations, and prolonged delays that left them unable to repair their homes or businesses.

Florida's property insurance market has undergone significant legislative reform in recent years—including changes enacted in 2022 and 2023—that modified certain bad faith procedures. One critical change eliminated the assignment of benefits mechanism for property insurance claims, which previously allowed contractors to pursue bad faith claims directly. Today, it is the policyholder—not the contractor—who must pursue these claims. If you signed an assignment of benefits before these reforms took effect, the rules governing your specific situation may differ, and you should consult an attorney familiar with transitional Florida insurance law.

Despite these reforms, the core bad faith protections under §624.155 remain intact for policyholders whose claims are handled improperly. Insurers still owe a duty of good faith to their insureds, and egregious claims handling continues to support viable bad faith actions throughout Collier County.

Steps to Take If You Suspect Bad Faith

If you believe your insurer is acting in bad faith, how you respond in the early stages of the dispute can significantly affect your ability to recover. Take the following steps:

• Document everything. Retain all correspondence with your insurer, including emails, letters, and written summaries of phone calls with dates and representative names.
• Request a written explanation. Ask your insurer to provide a written statement of the specific reasons for any denial or reduced payment.
• Obtain an independent estimate. Hire a licensed public adjuster or contractor to prepare an independent assessment of your damages. A significant gap between your insurer's offer and an independent estimate is powerful evidence.
• Track all deadlines. Florida law sets specific timeframes for insurers to acknowledge claims, begin investigations, and issue payment decisions. Violations of these deadlines support a bad faith finding.
• Consult an attorney before filing a CRN. The Civil Remedy Notice is a legal document with significant consequences. An experienced bad faith attorney can ensure it is filed correctly and strategically.

Time matters in these cases. Florida's statute of limitations for bad faith claims is generally five years from the date the cause of action accrues—typically the date the insurer denies the claim or the 60-day CRN period expires without a cure. However, the underlying breach of contract claim carries its own deadlines, and recent legislative changes have shortened some of these windows. Do not delay in seeking legal advice.

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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