Tag: Insurance Bad Faith Litigation

While there are frequently insurance disputes over coverage, damages, or liability – sometimes claims alleging insurance bad faith or plaintiffs seeking extra-contractual liability – there is no comprehensive definition of “good faith” in Florida; therefore, the full extent of what a “showing of good faith” means remains unresolved when it comes to liability insurers declining to cover the insured against whom a third party has asserted a claim.

The Eleventh Circuit has perhaps provided the most comprehensive definition, in stating that “Coblentz” agreements (settlement devices that can be used only when an insurer refuses to defend an insured) must be free from bad faith, collusion, and fraud, and entered with efforts to minimize liability. Still, those who defend insurers—and insurers themselves—are still left wondering what type of evidence specifically demonstrates that a Coblentz agreement should not be enforced for a lack of good faith.

The U.S. Eleventh Circuit Court of Appeals (covering Florida) recently made a decision helpful to insurance companies fighting insurance bad faith claims. Specifically, the court held that no reasonable jury could find that an insurer’s failure to disclose information about additional insurance in its statutory insurance disclosure rose to the level of bad faith.

Florida Law: Contents of Policies

In this case, a driver struck a pedestrian, who was badly injured. When the driver’s insurer (Allstate) offered full policy limits to claimant, the claimant rejected the offer. Several months later, the claimant informed the insurer that they were willing to settle and requested that the insurer provide disclosure pursuant to Florida law, which lists what every insurance policy must specify. Specifically, every policy must specify:

Florida common law also recognizes that insurers must exercise good faith in handling claims against their insureds. If an insurer is found to have acted in bad faith, it is liable for the entire judgement against the insured in favor of the injured third party, including any amounts necessary beyond the policy limits.

A new survey conducted by PolicyGenius reveals that while many Americans may believe that they understand their insurance policies, in fact, they do not, resulting in the mistaken belief that they are often the victims of bad faith insurance decisions. Unfortunately, this mistake could end up costing policyholders a fortune: Not only did the survey find that only four percent of policyholders were able to correctly define the terms that correlate their co-pays, but most individuals did not understand the basics when it comes to co-pays, deductibles, and out-of-pocket maximums, even though they were overly-confident of their understanding.

Unfortunately, not only are consumers overconfident about their own out-of-pocket costs, many aren’t confident at all when it comes to selecting the right insurance plan for their needs. This results in policyholders not only being at risk of choosing the wrong insurance plan, but also misunderstanding their exposure to charges when they receive treatment.