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Insurance companies are legally obligated to act in good faith when handling claims. However, some insurers engage in bad faith practices, delaying or denying legitimate claims to minimize payouts. Recognizing the warning signs can help Florida policyholders protect their rights and pursue fair compensation.

What Is Bad Faith Insurance?

Bad faith occurs when an insurance company fails to honor its obligations under the policy. Examples include unreasonable delays, underpayment, or denying claims without proper investigation. Florida law allows policyholders to take legal action against insurers who act in bad faith.

Common Warning Signs

Unexplained Delays

One of the most common indicators is prolonged investigation or repeated requests for documentation without explanation. While some delay is normal, excessive or repetitive delays may suggest the insurer is avoiding payment.

Lowball Settlements

Offering significantly less than the documented damages or injury value can be a sign of bad faith. Insurers sometimes use this tactic, hoping policyholders will accept a quick, reduced payout.

Ignoring Policy Provisions

Refusing to follow the terms outlined in your policy, such as coverage for specific damages, is a red flag. Insurers are required to honor valid claims according to the policy agreement.

Lack of Communication

Failure to respond promptly to calls, emails, or letters can indicate that your insurer is not taking your claim seriously. Consistent silence or vague responses may signal bad faith.

Unreasonable Denials

Denying a claim without proper investigation, misrepresenting policy terms, or citing vague reasons can constitute bad faith. Legitimate claims should always be thoroughly evaluated.

What Policyholders Can Do?

• Document Everything: Keep copies of correspondence, phone logs, and records of damages.
• Consult an Experienced Attorney: A Florida insurance attorney can evaluate whether bad faith practices are occurring and advise on legal options.
• File a Complaint: Policyholders may file a complaint with the Florida Department of Financial Services.

Final Thoughts

Bad faith insurance practices can leave policyholders without the compensation they deserve. By recognizing warning signs like delays, lowball offers, and denial without investigation, Florida policyholders can take proactive steps to protect their rights, seek legal guidance, and hold insurers accountable.

This post was written by Kelly-Ann Jenkins of Jenkins Law P.L. Kelly-Ann is an insurance attorney St. Petersburg, FL. The information on this site is not intended to and does not offer legal advice, legal recommendations, or legal representation on any matter. Hiring an attorney is an important decision, which should not be based on advertising. You need to consult an attorney for legal advice regarding your situation. 

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