Florida Bad Faith Lawsuit Heads to Trial

Every state bans insurance companies from acting in bad faith—where an insurer delays or denies paying a policyholder’s legitimate claim. However, can a state-created insurance company act in bad faith? In Florida, that’s the question to be decided, as a bad faith lawsuit heads to trial court, according to a recent article in the Sunshine State News.

The case in point concerns the nonprofit Citizens Property Insurance Corp., currently one of the largest insurers in Florida. Recognizing the high risk of its residents to hurricanes and other natural disasters, the state originally created Citizens to offer insurance to property owners who would otherwise be uncovered.

But in 2004, Citizens didn’t fully pay a claim from damage by Hurricane Ivan. In response, a Pensacola, Fla.-based property owner, the San Perdido Association, successfully sued the insurer. After Citizens paid the claim, the San Perdido Association filed a new lawsuit—this time alleging the company had acted in bad faith when it initially denied the claim. Citizens requested a dismissal, arguing that as a state-run entity, it was immune from bad faith lawsuits.

However, a circuit judge denied Citizen’s dismissal motion, arguing that under the law, some bad faith lawsuits against state entities are allowed. These lawsuits include those involving breach of contract, or when an agency commits a willful wrong, notes the article. After losing a subsequent appeal, Citizens faces trial court.

While large insurers face fines for bad faith contract breaches, some continue to commit the practice. That’s because they have extensive legal resources available to fight their policyholders’ claims. If you think your insurance company has acted in bad faith, work with a law firm experienced in fighting against big insurance companies. Sokolove Law will fight on your behalf to get the benefits you are rightfully owed. Contact us today for a free legal consultation.

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