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Florida Court Rules an Insured Can Bring a Bad Faith Claim against its Insurance Company after Issuance of an Appraisal Award

Recently, our Miami homeowners’ insurance attorneys learned that the Second District Court of Appeal in Florida ruled that an insured can bring a bad faith claim against an insurance company after just the issuance of an appraisal award.  Previously, many insurance companies would argue and win on the grounds that bad faith claims are not ripe until a judgment has been entered in favor of the insured.

The facts of the case in Hunt v. State Farm are straight forward.  Mr. Hunt sustained damage due to a sinkhole in 2006.  He filed a claim with his insurance company, State Farm, to recover for damages associated with the sinkhole.  Hunt disagreed with the insurance company’s estimate for damage and filed a civil remedy notice of insurer violation (“CRN”).  This civil remedy notice started a 60 day period in which State Farm could cure the alleged wrongful conduct.  Hunt sued State Farm for a bad faith claim.

State Farm moved to dismiss the lawsuit and require appraisal.  The trail court granted the motion to dismiss and ordered the appraisal.  During appraisal, an award of $150,000 was awarded to Mr. Hunt.  However, Mr. Hunt dismissed his lawsuit and instead filed a bad faith action.

State Farm moved for summary judgment which was granted.  The court reasoned that Hunt had not obtained a judgment against State Farm and that he did not state a specific amount in his Civil Remedy Notice.

Hunt appealed the trial court’s ruling to the Second District Court of Appeal.  The court held that an appraisal award establishing the validity of the insured’s claim will satisfy the conditions necessary to bring a bad faith action.  The court looked to previous case law that held a judgment was not the only way to obtain favorable resolution against an insurance company.  The court noted that an arbitration award would also establish the validity of the insured’s claim. This ruling will aid Florida insurance holders who are pursing claims of bad faith against insurance companies across the state.

Bad faith claims are commonly initiated when the insurance company does not fulfill its contractual obligations, violates standards of honesty in dealing with others, or acts in an intentionally dishonest or misleading manner.

Bad faith can encompass the failure of the insurance company to promptly and fully investigate a claim, denying a valid claim, refusing to settle a claim or reasonably entertain settlement offers, refuses to pay claim without explanation, or uses an unreasonable interpretation of the policy’s terms.

While not every dispute with the insurance company will be considered bad faith, a qualified homeowners’ insurance company will evaluate the insurance company’s actions taken regarding your claim and assess whether you have a valid bad faith claim.

Greenberg Stone and Urbano: Protecting Homeowners Across the State of Florida

            Homeowners purchase their insurance plans and faithfully pay premiums expecting that in the event they experience property damage, it will be covered without issue.  Sadly, many insured find this to be far from the truth as their claim is denied or diminished.  The Miami Homeowners’ Insurance Attorneys at Greenberg Stone and Urbano are committed to assisting South Florida homeowners in insurance claim disputes, including bad faith claims.  For over 130 collective years, our dedicated homeowners’ insurance attorneys have assisted clients across South Florida, earning us an AV rating from Martindale Hubbell and recognition as one of South Florida’s top firms by the Miami Herald.   Allow us to put our experienced to work for you.  Call us at (888) 499-9700 or (305) 595-2400 or visit our website to schedule your initial consultation.

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