The Broken Promise of Insurance Coverage in Florida
When Floridians pay their insurance premiums, they’re buying more than just peace of mind – they’re purchasing a promise that their insurer will handle claims fairly and in good faith. However, this promise is unraveling due to sweeping statutory reforms passed by the Florida Legislature. While intended to address rising premiums and excessive litigation, these changes have gone too far, making it harder for everyday Floridians and business owners to get the coverage they’ve paid for.
Bad Faith on the Rise
The recent reforms didn’t eliminate bad faith conduct; they merely made it harder to bring legitimate bad-faith cases to light. Insurance companies now have multiple opportunities to ‘correct’ their missteps before a lawsuit can be filed, giving them cover to delay, deny, and deflect without facing consequences. This has shifted the burden onto plaintiffs’ lawyers, particularly in personal injury and wrongful death cases, who must now act as stand-in insurance adjusters.
We recently represented a family in a tragic wrongful death case where the insurance company failed to respond in good faith within the required 90 days, claiming they were still waiting for exposure clarification despite having all necessary information. This kind of delay, now legally insulated, demonstrates how the reforms have failed the people they were meant to protect.
Commercial Policyholders Left Behind
The misconception that bad faith reform only affects personal injury cases overlooks the broader issue: bad faith conduct is rampant in commercial insurance, affecting cases involving Directors and Officers (D&O) liability, general liability, cyber coverage, and Errors and Omissions (E&O) policies. Businesses and professionals relying on these policies to protect against serious financial exposure are finding that insurance carriers are either denying coverage outright or refusing to tender the full amount owed, even when liability is obvious.
Premiums Keep Rising
Despite the legislative changes, Florida consumers and businesses continue to see premiums climb, and insurance carriers are still pulling out of the state. The only change is that policyholders now have fewer legal remedies when things go wrong. Lawmakers took a broad approach to addressing property insurance litigation, sweeping in unrelated claims and revealing a troubling lack of nuance.
What Policyholders Need to Know
Until the law is corrected, policyholders must be proactive in protecting themselves. This begins with honesty at every stage of the insurance process, from the initial application to filing a claim. Full disclosure is essential to prevent insurers from denying claims based on inconsistencies or omissions. Policyholders should maintain clear, professional communication throughout the process, documenting every interaction with the insurance company.
Engaging legal counsel early is crucial. Waiting until a claim is denied can limit options; having an attorney involved from the start ensures appropriate responses to requests, compliance with policy terms, and preservation of rights. In an environment where the law is no longer on their side, the best defense for policyholders is preparation, professionalism, and persistence.
Time for a Course Correction
Florida’s bad faith reform has failed spectacularly, emboldening insurance companies at the expense of consumers. This is not a partisan issue but a consumer protection issue. The Legislature must revisit the bad faith reforms, restore accountability, and remember why insurance laws exist: to protect those who pay the premiums.
