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Insurance Companies and Bad Faith

Insurance companies are supposed to help you recover from damages you suffered in an auto accident. Unfortunately, sometimes the insurance company itself becomes the source of damages.

Under the Florida law commonly called the Insurance Bad Faith Statute, an individual can file suit against an insurance company if he or she suffers damages due to certain actions of the insurer, such as:

  • Unreasonably avoiding settlement of a claim that clearly should have been settled
  • Failing to include a statement explaining the coverage along with payment of a claim
  • Intentionally delaying settlement of a claim under one part of an insurance policy in order to influence the settlement of a pending claim under another part of the policy

Specifically, the statute defines bad faith as follows: Not attempting in good faith to settle claims when, under all the circumstances, it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for her or his interests.

With many injured parties relying on the Personal Injury Protection (PIP) coverage required by Florida law, under which insurance companies are responsible for paying medical bills for their own insureds, the bad faith law created the first pathway for legal action by individuals against their own automobile insurance carriers.

It has been argued that claimants, too, are capable of acting in bad faith, for example refusing to accept reasonable settlement offers. Or worse, taking advantage of PIP coverage with fraudulent medical claims. But recognizing the relative powerlessness of the average individual against large insurance companies, the law seeks to protect individuals against the potential for corporate abuse.

The courts have ruled that an action for insurance bad faith does not have to wait until other claims related to the underlying accident are settled. Therefore, your Tampa-area auto accident attorney can help you recognize when you have been a victim of insurance bad faith and take immediate action.

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