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Florida 1st DCA Approves Bad Faith Claims against Citizens Property Insurance

If you are a Florida homeowner who has struggled with Citizens Property Insurance Corporation, you might be well aware that Citizens has developed a representation as Florida’s homeowner’s insurer of last result.  Given the quasi-public insurer’s pattern of vexing homeowners who suffer a serious loss, the decision by Florida’s 1st District Court of Appeals (DCA) constitutes an important victory for policyholders insured by Citizens.  The decision marked an important protection for policyholders by limiting the ability of Citizens to rely on its quasi-public status in claiming sovereign immunity from claims of property damage insurance in bad faith.

The 1st DCA considered whether an insured has a legal right to pursue extra-contractual damages against Citizens for bad faith conduct in adjusting or paying an insured’s claim.  While the trial court had found that Citizens was immune from statutory bad faith claims under Florida law because of its status as a quasi-government entity, the 1st DCA reversed.  The 1st DCA based its decision on Florida Statute 627.351(6)(s)2, which requires Citizens to handle claims “carefully, timely, diligently and in good faith.”

Citizens argued that it was immune from civil liability for bad faith claims because it was a government entity, at least to some extent.  The insurer contended that the authorization of lawsuits by policyholders against the insurer would cause harm to taxpayers by depleting public funds.  Under this theory, taxpayers would suffer if policyholders could obtain damages beyond the value of a claim, exposing the insurer to extra-contractual damages, prevailing party fees, attorney fees, and the costs of defending lawsuits.

The appellate court wisely acknowledged the flawed logic in this position.  As pointed out by the court, Citizens will not incur damages exceeding the value of actual losses under an insurance claim as long as the insurer observes its duty of good faith and fair dealing in adjusting and paying policyholder claims.  Further, the court’s decision provides protection to the many Florida residents with homeowner’s insurance through Citizens.  The court dismissed the insurer’s concerns about the impact on taxpayers of permitting bad faith claims as an unjustified assumption that policyholders would pursue “frivolous” bad faith lawsuits.  The decision of the 1st DCA represents a check on abusive treatment of policyholders by the insurer.  Without the threat of liability that might result in damages exceeding the value of the claim, Citizens would have no incentive to handle claims fairly and in a timely manner as required under Florida law.

Greenberg Stone and Urbano Seeking Recovery for Bad Faith Denial of Homeowner’s Insurance Claims 

If you have filed a policyholder’s claim with Citizens and you were exposed to a lowball offer, unjustified denial, or unreasonable delay, our Florida Homeowner’s Insurance Claim Attorneys at Greenberg Stone and Urbano will tenaciously pursue the full compensation you deserve.  For over 130 collective years, our firm has assisted accident victims in personal injury and wrongful death actions across South Florida.  We seek to obtain compensation for your tangible and intangible damages, including medical bills, lost wages, pain and suffering, and more.  Our skill and dedication has earned us an AV rating from Martindale Hubbell and recognition as one of South Florida’s top firms by the Miami Herald.   Call us at (888) 499-9700 or (305) 595-2400 or visit our website to schedule your initial consultation.


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