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Bad Faith and Homeowners’ Insurance

Your Florida homeowners’ insurance policy is a contract.  As such, all the basic rules of contract law apply and are in full force when it comes to homeowners’ insurance.  This includes the duties of good faith and fair dealing, which is implied in all contracts.  The covenant of good faith and fair dealings automatically exists in all contracts by operation of contract law.  If this duty is breached, the policy holder may have a valid tort claim against the insurer for breach of the contract and the damages that have resulted.

Bad Faith Defined

An insurance company has several duties to its policyholders.  For instance, the insurance company is required to investigate damage that occurs to a covered home or other pieced of property, determine whether the damage is covered, and pay the proper amount to repair or replace the damaged property.  Bad faith as it relates to homeowners’ insurance often exists in this context.  It could involve the insurance carrier’s failure to properly investigate the damage and valuate the damaged property.  At times, the insurance company will fail to acknowledge the claim entirely. 

Has My Insurer Acted in Bad Faith?

To assess whether you may have a viable bad faith claim against your homeowners’ insurance company, first be sure that you have met all your obligations under the homeowners’ insurance contract.  Your basic obligations include:

  • Reporting the damage promptly;
  • Mitigating the damage as much as you can;
  • Truthfully reporting what happened; and
  • Using the insurance payment to repair the damage along with cooperating in the repair process.

If you have met these steps and paid your premiums, then it is now up to the insurance company to meet its obligations.  If your insurer has not performed the following actions, he or she may have acted in bad faith:

  • Conduct prompt and thorough investigations;
  • Carefully review the claim and all reasons why it should be approved;
  • Provide a prompt ruling on the claim with a detailed reason for the acceptance and payment or the denial; and
  • Pay all approved claims promptly and in full.

Bad faith involves more than just mistakes made within the office and misplaced paperwork or sloppy delays.  It often involves the intentional desire to limit the company’s liability or to delay claims so that payments are made when it is more convenient to the insurer.  At times, internal policies within the company could lead to the unfair denial of legitimate claims.  If you feel your insurance company may be acting in bad faith, consult with a licensed homeowners’ insurance attorney as soon as possible.  Your attorney will investigate your case and, if grounds exist, file a bad faith action against the insurer.  If your claim is successful, you could receive not just payment of the original claim, but also compensatory damages to compensate you for your losses experienced due to the delay or denial.  At times, punitive damages will even be awarded.

Greenberg Stone and Urbano:  Assisting You in Bringing a Bad Faith Action Against the Insurance Company

If you believe your insurance company is acting in bad faith, you may have the right to recourse.  Contact the Miami Homeowners’ Insurance Attorneys at Greenberg Stone and Urbano for skilled assistance with your claim.  We have over 130 collective years of experience representing policy holders across South Florida.  We have the experience and knowledge to provide you with top notch legal representation.  Our firm has received a coveted AV rating from Martindale Hubbell and the Miami Herald recognized us as a top firm in South Florida.   Allow our exceptional attorneys to provide you with superior legal services in the South Florida area.  Call us at (888) 499-9700 or (305) 595-2400 or visit our website to schedule your initial consultation.


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