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How to Avoid Florida’s Bad Faith Minefield

March 07, 2018| By Tim Fletcher | Auto/Motor, Personal Umbrella | English

Region: North America

It starts innocently enough - a seemingly routine “rear-ender” car accident that involves a policyholder wintering in Florida. The claimant driver of the other vehicle quickly seeks medical treatment and attorney representation. Then the attorney sends a time-limit demand for the policy limit, contending his client has multiple bulging discs that will require surgery.

Routine case? Or a potential bad faith bomb about to detonate? In Florida - and in many other parts of the U.S. - a carrier’s conduct will determine whether the claim resolves without incident or instead morphs into a time-intensive and costly bad faith suit.

Florida is unique in that it has no objective bad faith standard, defining it as more than “mere negligence” without calling for a showing of evil intent. As a result, carriers everywhere need to watch for common pitfalls in order to reduce costly bad faith awards. For example:

  • What are some of the unique problems posed by “time limit” demand letters and how can a missed deadline and/or failure to meet a key term “open up” the policy limit?
  • How can carriers avoid bad faith in a clear-liability case with a likely judgment in excess of a policy limit? Do carriers have an affirmative duty to offer the policy limit in such cases, even in the absence of a demand?
  • What are some of the tender traps that might be used to “set up” carriers for bad faith? How should carriers respond when presented with a serious injury case that involves low limits?

We recently offered a webinar for Gen Re clients interested in learning more about the bad faith minefield in Florida and ways to avoid it. Click on the following link: Navigating the Bad Faith Minefield to listen to the webinar and learn more on this topic.


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