Unless you are buying insurance, when you file a claim, you expect the insurance company to pay. Of course, you may encounter some disagreement about the actual value, but you always expect them to act in your best interest. After all, they are your insurance company, right?
Not all insurance companies act in good faith
Unfortunately, no. While most major Florida insurance companies do act in good faith, you may find that cut-rate insurance companies do not. In addition, you may find that even your major, national insurance company acting in bad faith after natural disasters or some other large-scale damage.
Why would an insurance company act in bad faith?
Bluntly, insurance companies only make money by minimizing their payouts to their customers. In other words, every dollar they pay to you is a dollar they cannot keep for themselves, i.e., stock buybacks, CEO bonuses, etc. Especially for publicly traded companies; they have a fiduciary duty to make an ever-increasing profit each year, and paying claims reduces profit, which can, in turn, drop their stock price.
What does a bad faith insurance practice look like?
Your Florida insurance company must respond to you within a reasonable time, and they must justify both the adjuster’s reasons for their findings and their own settlement amount. If they are unreasonably delaying making a finding, or they refuse to justify their proposed settlements, they likely acted in bad faith.
In addition, if you were sold insurance based on lies or misinformation, that too is a bad faith insurance practice. Insurance companies cannot withhold or lie about policy limitations and coverages.
What do I do?
For our Indialantic, Florida, readers, if you believe that your insurance company is working in bad faith (also known as unfair claims practices), or if you just have questions about how your insurance company is treating you, there are options. First, tell the insurance company that you believe they are acting in bad faith and then explain why.
Sometimes, just calling out that bad faith, which lets the insurance company know that you know your rights, will solve the issue. Second, in Florida, you can call the Consumer Helpline of the Office of Insurance Regulation. Finally, you may have to contact an attorney.