Since Florida requires that actions for breach of contract and bad faith insurance claims be bifurcated, insurance companies routinely oppose discovery and presentation of evidence pertaining to an insurance carrier’s conduct in processing the claim. Our property damage claim attorneys understand that while an insured frequently will contend that evidence of an inadequate investigation should be relevant during discovery and admissible at trial for purposes of impeachment, insurance carriers routinely claim that such evidence has no bearing on the issue of whether a breach of the insurance contract has occurred.
It is not surprising that insurance companies would prefer to keep this type of evidence out of the breach of contract phase of an insurance policy claims dispute. However, evidence of an investigation that fails to comply with industry standards can be relevant in a breach of contract case and expose the insurer to consequential damages that are caused by the breach of contract. Florida insurance law imposes obligations on insurers to act in specific ways, such as those that require carriers to create and implement procedures and policies for proper investigation of claims brought by policyholders. Florida insurance laws also prohibit insurance carriers from denying a policyholder’s claim without undertaking a reasonable investigation that includes all available facts and information. Continue reading →