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Insurers Must Process Claims Within a Reasonable Timeframe

Fri Jan 12th, 2018 on     Insurance Claims,    

Florida insurers owe a duty of good faith to their policyholders.  Essentially, Florida law (as is the case in various other jurisdictions throughout the country) requires that insurers avoid acting purely out of self-interest in handling the claims filed by their policyholders.  In processing the claims filed by their policyholders, insurers must act with a degree of care and diligence akin to that a reasonably prudent person who is managing the affairs of their own business.  Failure to act in good faith can expose the insurer to substantial liability, thus giving the policyholder a remedy at law.

Importantly, timely processing of claims is among the many violations that legitimate bad faith insurance litigation.  Timeliness is inextricably tied to “bad faith,” as policyholders may be exposed to significant financial distress when there has been a delay.

In contexts besides the processing of claims, for example, Florida law ties issues of timeliness to bad faith liability.  Specifically, section 624.155(b) of the Florida Statutes gives policyholders a civil remedy in the event that their insurer has failed to settle their claims in a timely manner.

A Florida court will assess whether the insurer has violated their duty of good faith by assessing the “totality of the circumstances.”  For example, if the processing delay is justified by a lack of clarity on relevant facts pertaining to the claim at-issue, and if the insurer has notified the policyholder about the need for further delay (perhaps to perform an additional investigation into the facts), then in all likelihood, a court would not find that the insurer engaged in bad faith conduct.  On the other hand, if the processing delay occurred without justification, was for a significant time period (i.e., several months), and the policyholder was not notified, then a court may find that the insurer engaged in bad faith conduct.

If the circumstances indicate that the insurer caused the delay so as to change the power dynamic and potentially induce the policyholder into accepting a lower settlement offer, then a court may find that such conduct is willful and malicious enough to justify a punitive damages award.

If you are a Florida policyholder and you believe that your insurer may have acted in bad faith by causing unreasonable delays in the processing of your insurance claim, you may be entitled to sue and recover damages on the basis of such bad faith conduct, in accordance with Florida state law.  Depending on the egregiousness of the defendant-insurer’s conduct, you may be awarded significant punitive damages.  Bad faith claims — whether brought pursuant to circumstances involving an unreasonable delay, or for some other wrongful conduct — can be challenging to litigate, however.  It’s therefore critical that you work with an experienced bad faith insurance attorney who can advocate effectively on your behalf.

Ver Ploeg & Lumpkin, P.A. is a Florida-based insurance litigation firm that has represented a range of policyholders in bad faith litigation for over twenty years.  We are committed to our clients and work very closely with clients — from beginning-to-end of the client engagement process — to ensure that our strategic objectives are aligned throughout the process.

Call (305) 577-3996 to schedule a free consultation with an attorney here at Ver Ploeg & Lumpkin, P.A., a successful Miami insurance law firm.

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