Insurance Bad Faith Claims in Orlando, Florida

When you file an insurance claim after an accident, medical crisis, or property loss, you expect your insurer to handle it honestly and promptly. Florida law requires nothing less. But insurers sometimes delay, underpay, or outright deny valid claims to protect their bottom line. When that happens, you may have a legal claim for insurance bad faith — and in Orlando and throughout Florida, policyholders have meaningful legal tools to fight back.

What Constitutes Insurance Bad Faith in Florida

Florida recognizes two categories of bad faith claims: first-party bad faith and third-party bad faith. First-party bad faith occurs when your own insurer fails to deal fairly with you — for example, when your homeowner's insurer refuses to pay a legitimate hurricane damage claim without a reasonable basis. Third-party bad faith arises when a liability insurer fails to settle a claim against its insured within policy limits, exposing that insured to an excess judgment.

Under Florida Statute § 624.155, insurers have a statutory duty to handle claims in good faith. The law specifically prohibits insurers from:

• Failing to attempt to settle claims promptly when liability is reasonably clear
• Denying claims without conducting a reasonable investigation
• Misrepresenting facts or policy provisions to claimants
• Offering significantly less than the amount ultimately recovered
• Failing to provide a written explanation for a claim denial

Florida also recognizes common law bad faith claims rooted in the insurer's general obligation to act with good faith toward both its insured and, in some contexts, third-party claimants.

The Civil Remedy Notice: A Critical First Step

Before filing a statutory bad faith lawsuit in Florida, you must serve a Civil Remedy Notice (CRN) on the insurer and the Florida Department of Financial Services. This is a mandatory prerequisite under § 624.155 that many claimants overlook — often to their detriment.

The CRN gives the insurer 60 days to "cure" the alleged bad faith violation by paying the full amount owed under the policy, plus interest. If the insurer makes a full and adequate cure within that window, the bad faith claim is extinguished. If it does not cure — or offers only a partial payment — the claimant may proceed with a bad faith lawsuit.

The notice must be specific. It should identify the policy, the claim number, the policy language at issue, and the specific conduct that constitutes the statutory violation. A vague or incomplete CRN can be fatal to your case. An experienced Orlando insurance attorney can help you draft a notice that preserves your rights and puts maximum pressure on the insurer.

Damages Available in a Florida Bad Faith Case

One of the most powerful aspects of Florida's bad faith law is the damages available to successful claimants. Unlike a standard breach of contract claim — which limits recovery to the policy limits — a bad faith judgment can significantly exceed those limits.

In a first-party bad faith case, available damages may include:

• The full amount of the underlying insurance claim, without reduction
• Consequential damages caused by the insurer's bad faith conduct
• Attorney's fees and court costs under Florida law
• Interest on delayed payments
• In egregious cases, punitive damages where the insurer's conduct was fraudulent or malicious

In third-party bad faith cases — common in auto accident litigation throughout the Orlando area — the insurer can be held liable for the entire excess judgment entered against its insured, even if that judgment is many times the policy limit. Florida courts have consistently held that liability insurers must accept reasonable settlement demands within policy limits when the insured's liability is clear and the claimant's damages exceed those limits.

Common Bad Faith Scenarios in Orlando Insurance Disputes

Central Florida's insurance market — shaped by hurricane exposure, high-volume auto traffic, and a competitive personal injury landscape — generates a wide range of bad faith situations. Some of the most common involve:

• Hurricane and storm damage claims: Insurers routinely undervalue wind and water damage, rely on biased inspectors, or invoke policy exclusions without justification after major storms.
• Auto accident liability claims: When a crash results in serious injuries and the at-fault driver's policy limits are inadequate, the liability insurer's failure to timely accept a demand within limits can trigger excess exposure and a bad faith claim.
• Uninsured/underinsured motorist (UM/UIM) claims: Florida has one of the highest rates of uninsured drivers in the nation. UM insurers sometimes handle these first-party claims in bad faith by dragging out investigations or making lowball offers on serious injury cases.
• Disability and health insurance denials: Improper denial of medically necessary treatment or long-term disability benefits based on pretextual grounds can support a bad faith claim.

In Orlando specifically, litigation over property insurance bad faith has surged in recent years, particularly following major weather events. Florida's legislature has made several changes to the bad faith landscape in recent years, including modifications to assignment of benefits and fee-shifting rules — changes that make it all the more important to work with an attorney who stays current on Florida insurance law.

How to Protect Your Rights After a Bad Faith Denial

If you believe your insurer is handling your claim unfairly, act quickly. Florida's statute of limitations for bad faith claims is five years for statutory claims under § 624.155, but the clock on your underlying claim may be shorter — particularly for property damage or auto claims. Waiting too long can eliminate your options entirely.

Take these steps if you suspect bad faith:

• Document every communication with your insurer, including dates, names, and what was said
• Keep copies of all written correspondence, including denial letters and reservation of rights letters
• Gather independent evidence of your damages — get your own contractor estimates, medical records, or accident reconstruction reports
• Do not sign any release or accept a final settlement without consulting an attorney
• Consult an Orlando insurance bad faith attorney before the CRN deadline runs

Insurers have teams of adjusters and defense lawyers working to minimize what they pay. A policyholder going it alone is at a serious disadvantage. An attorney with experience in Florida bad faith law can assess whether your insurer's conduct rises to the statutory threshold, draft and serve the required Civil Remedy Notice, and build a case that holds the insurer accountable for the full scope of damages it caused.

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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