An insurance policy is a promise: you pay premiums, and when disaster strikes, the company pays what it owes, promptly and fairly. When an insurer instead delays without reason, lowballs a clear claim, or ignores its own policyholder's interests, Florida law calls that bad faith, and it gives policyholders a way to fight back.
The catch is that bad faith is rarely announced. It hides inside "ongoing investigations," unreturned calls, and estimates that never quite add up. Here is how to recognize it, and what Florida law lets you do about it.
What "Bad Faith" Means in Florida
Bad faith is not the same as a claim denial. Insurers are allowed to deny claims that genuinely are not covered, and they are allowed to investigate before paying. Bad faith arises when the insurer fails to handle the claim with the fairness and honesty the law requires: when it does not attempt in good faith to settle a claim that, acting fairly and honestly toward its insured and with due regard for the insured's interests, it could and should have settled.
Two important clarifications under current Florida law:
- Negligence alone is generally not enough. Since Florida's 2023 tort reform (HB 837), mere sloppiness or an honest mistake by an insurer does not by itself constitute bad faith. The conduct must go beyond simple negligence.
- Policyholders have duties too. Claimants and their representatives are expected to act in good faith when providing information and making demands, and a claimant's own conduct can reduce what a bad faith case recovers.
That makes clean documentation and reasonable, well-supported demands more important than ever.
The Insurer's Duty to You
Florida law and standard policy obligations generally require insurers to:
- Acknowledge and act on communications about claims within a reasonable time
- Conduct a reasonable, timely investigation based on all available information
- Pay or deny claims within statutory timeframes, and explain denials
- Refrain from misrepresenting policy provisions or relevant facts
- Attempt in good faith to settle claims when liability and damages are reasonably clear
- In liability cases, protect the insured from an avoidable excess judgment
When a company falls short of these duties in ways that harm you, a bad faith claim may follow.
Common Bad Faith Tactics to Watch For
Patterns we regularly see in Florida claims include:
- Unreasonable delay. Months of "pending review," rotating adjusters, and repeated requests for documents already provided.
- Lowball offers on clear claims. Offers that ignore the insurer's own adjuster findings or independent estimates.
- Misrepresenting the policy. Citing exclusions out of context or claiming coverage does not exist when it does.
- Inadequate investigation. Denying a claim without inspecting the property, interviewing witnesses, or reviewing medical records.
- Cherry-picked experts. Relying on engineers or medical examiners known for insurer-friendly opinions while ignoring contrary evidence.
- Moving the goalposts. New document demands, examinations under oath, and conditions that appear only after you push back.
- Pressure tactics. Exploiting a policyholder's financial desperation after a storm or injury to force a cheap, fast settlement.
- Failure to settle within limits. In liability claims, refusing a reasonable within-limits demand and exposing their own insured to a personal excess judgment.
One tactic alone may not prove bad faith, but a documented pattern is powerful evidence.
First-Party vs. Third-Party Bad Faith
Florida recognizes two broad categories:
- First-party bad faith: your own insurer mishandles your claim, such as a hurricane or water damage claim under your homeowners policy, or a UM/UIM claim under your auto policy. These claims are creatures of statute in Florida.
- Third-party bad faith: a liability insurer fails to protect its insured when handling someone else's claim against them, classically by refusing to settle within policy limits and leaving the insured exposed to a judgment above the policy.
The distinction matters because it changes the procedure, the parties, and the available remedies. It also generally means the underlying claim must be resolved before the bad faith case ripens.
The Civil Remedy Notice (CRN) Process
For statutory bad faith claims, Florida requires a formal warning shot before a lawsuit: the Civil Remedy Notice, filed under Florida Statute 624.155.
Here is how the process generally works:
- The CRN is filed electronically with the Florida Department of Financial Services, with a copy to the insurer. It must specify the statutory provisions violated, the facts giving rise to the violation, and the policy language at issue. Vague or boilerplate notices can be fatal to the later case.
- The insurer gets a 60-day cure period. If the company pays the damages owed or otherwise corrects the circumstances within 60 days, the statutory bad faith action is generally extinguished.
- If the insurer fails to cure, the policyholder may proceed with a bad faith lawsuit once the claim is ripe.
The CRN is both a legal prerequisite and a strategic tool: a well-drafted notice forces the insurer to confront its exposure and frequently produces payment during the cure window. It is also technical enough that drafting errors can sink an otherwise strong case. This is not a do-it-yourself document.
Note that in liability cases, current Florida law also gives insurers certain safe harbors (for example, tendering policy limits promptly after notice of certain claims) that can affect whether a bad faith theory is viable. An attorney can evaluate how these rules apply to your facts.
What Damages Can a Bad Faith Claim Recover?
This is why bad faith claims matter: they can break through the policy limits. Depending on the case, recoverable damages may include:
- The full amount of your actual damages caused by the bad faith, even where that exceeds the policy limits
- In third-party cases, the entire excess judgment entered against the insured
- Consequential damages flowing from the insurer's conduct, such as additional losses caused by delayed payment
- Interest, court costs, and in many cases attorney's fees as provided by statute
- Punitive damages in rare cases involving willful, malicious, or repeated misconduct meeting strict statutory standards
In short, an insurer that wrongfully gambles with your claim can end up owing far more than it would have paid by simply honoring the policy.
Protecting Yourself: Build the Record
If you suspect bad faith, start documenting now:
- Keep every letter, email, and estimate; confirm every phone call in writing
- Log dates, names, and promised deadlines
- Comply with reasonable policy obligations (cooperation, proof of loss, examinations under oath) with counsel's guidance
- Do not sign releases or cash "final" checks without review
A meticulous paper trail transforms a frustrating claim into a provable case. If your claim involves storm damage, our guide on denied hurricane claims covers the property-specific steps.
Talk to a Florida Attorney
If an insurance company is delaying, denying, or shortchanging your claim, do not keep fighting it alone. At Ruiz Legal, we handle bad faith insurance and first-party insurance claims across Florida, and we know the tactics because we see them every day. The consultation is free, we work on contingency (no fees unless we win), and we serve clients in English and Spanish. Call 305-771-6801 or request a free consultation today.
This article is for general informational purposes only and is not legal advice. Reading it does not create an attorney-client relationship. Every case is different. Consult a licensed Florida attorney about your specific situation.