Archive: November 2018

The longstanding standard of what constitutes bad faith in Florida was determined by the Florida Supreme Court almost 40 years ago. The Court determined that an insurer has a duty to use the same degree of care and diligence as someone “of ordinary care and prudence.” Insurers must investigate the facts, give fair consideration to settlement offers and–where a reasonably prudent person would–pay total recovery.

However, two recent appellate decisions have made some important changes to what constitutes a bad faith insurance claim in the context of third-party liability claims, as we discuss below.

Eleventh Circuit Decision

The first of those decisions—by the Eleventh Circuit—upheld a lower court decision finding that Geico deciding to offer settlement limits twenty days from the first notice of the claim was not done in good faith as a matter of law. The court ultimately upheld the jury verdict in favor of plaintiffs, finding that the jury was reasonable and had enough evidence to conclude that Geico had acted in bad faith.

In September, a lawsuit was filed against Tower Hill Insurance in Florida, alleging that the company engaged in fraud concerning a number of claims filed by Hurricane Irma victims, defrauding them of money that they are owed. The lawsuit specifically alleges that Tower conspired with two other companies—Humble and Ladder Now—to deny or underpay compensation on various insurance claims filed by the hurricane victims.

According to the complaint, Ladder Now is an “unlicensed independent adjusting firm” that effectively worked with Humble, a consulting and restoration firm, to doctor fake engineering reports that ultimately found little-to-no damage done as a result of the hurricane. As a result, the lawsuit not only accuses Tower Hill of fraud, but also of mail and wire fraud, theft, and the use of unlicensed adjusters and engineers to systematically rob policyholders of premiums. The complaint alleges not only past harms to these policyholders—but ongoing harm—as a result of Tower’s allegedly nefarious activities.