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Options when your homeowners insurance company acts in bad faith

On Behalf of | Dec 7, 2022 | Insurance Law and Litigation

Many families in Florida spend their hard-earned money on insurance to protect what is likely their most valuable asset: their home. If a natural disaster or catastrophic event happens, we except insurance companies to fulfill their obligations.

Unfortunately, insurance companies sometimes fail to uphold their end of the bargain. The fewer claims paid by an insurer, the greater the insurer’s profit.

How insurers may try avoiding their obligations

An insurer’s intentional effort to avoid obligations to policyholders is generally referred to as bad faith insurance.

Examples of bad faith insurance include intentionally misleading policyholders regarding the terms of their policy, refusing to pay for the full value of a claim or taking unreasonable time to approve a claim in hopes a policyholder will withdraw their claim.

Fighting back against bad faith

When an insurer acts in bad faith, policyholders can fight back.

The law imposes a duty on insurer’s to act in good faith. Insurance companies must act honestly towards policyholders and not unreasonably delay payments. If an insurer denies a claim, they must disclose the basis for the denial.

A policyholder can bring a lawsuit against an insurer who unreasonably denies a claim. In some cases, insurers acting in bad faith may be liable for damages beyond the amount of an insurance claim, including payment of a policyholder’s attorney fees.

If you find that your insurer has denied a claim, you should consult an experienced attorney who can help negotiate on your behalf and, if necessary, bring a lawsuit.