Florida Passes New Law to Hold Insurance Companies Accountable

1. Florida’s HB 837 has changed the bad faith insurance framework.
2. The amendment to Section 624.155, Florida Statutes, provides a safe harbor for insurance companies to correct alleged bad faith by attempting to settle a claim in good faith.
3. The amendment also introduces two new procedural devices for insurance companies to avoid bad faith claims in a multi-claimant situation.
4. An insurance company can avoid a claim for bad faith by tendering the lesser of the policy limits or the amount demanded by the claimant within 90 days of receiving notice of a claim.
5. If the insurance company fails to do so, this fact is inadmissible in any action seeking to establish bad faith. 1. Florida’s bad faith insurance framework has been modified to reduce the likelihood of insurance companies being liable for bad faith.
2. Mere negligence alone is insufficient to constitute bad faith according to the new changes in Section 624.155, Florida Statutes.
3. Insureds, claimants, and representatives now have a duty to act in good faith in furnishing information regarding the claim and attempting to settle the claim. – HB 837 confirms that the new statutory duty does not create a separate cause of action, but may be considered in any action for bad faith against the insurance company.
– In an action for bad faith against the insurance company, the trier of fact may consider whether the insured, claimant, or representative of the insured or claimant did not act in good faith in furnishing information regarding the claim, in making demands of the insurer, in setting deadlines, and in attempting to settle the claim.
– These changes do not impair any right under an insurance contract in effect on or before March 24, 2023, and will only apply to insurance contracts issued or renewed after that date.
– HB 837 created significant changes to the bad faith insurance framework in Florida, which may impact the ability to bring a bad faith claim against the insurance company or reduce the amount of damages recoverable.

https://www.jimersonfirm.com/blog/2023/04/florida-hb-837-changes-to-bad-faith-insurance-framework-impact-on-claims-and-lawsuits/