The Florida Supreme Court recently made it clear that auto insurance companies don’t have the right to ward off bad faith lawsuits after years of unreasonable delays, denials and non-response by paying the policy limits at the last minute.
In Fridman v. Safeco Ins. Co. of Ill., the court denied a bid by the insurer to assert it couldn’t have acted in bad faith because it did finally pay the insured. But bad faith by insurers can be revealed as much as much by the timing of the payment as the amount.
And in this case, the plaintiff – a man who was injured in a car accident by an underinsured driver – waited four full years to get a check from the insurance company. And even then, it came with settlement agreement language that effectively barred him from taking further action to collect anything further. He refused to accept it, and it was another six months before the insurer sent him another check with no such language.
But by that time, plaintiff was set on pursuing a bad faith insurance action. In Florida, people can file either a first- or third-party lawsuit against insurance companies for delaying or denying reasonable claims for benefits under the policy. If the court finds the insurer was liable for the underlying claim and acted in bad faith toward the insured, it can be made to pay triple damages. That’s not three times the policy limit – that’s three times the actual damages. Continue reading