If your insurance company denied a legitimate claim, delayed payment for months, or offered you a fraction of what your policy covers, you’re not just dealing with bad customer service. You may be dealing with bad faith. Florida has some of the most detailed bad faith insurance statutes in the country, and understanding how they work can mean the difference between accepting a lowball settlement and recovering what you’re actually owed. The problem is that most policyholders don’t realize they have legal recourse beyond simply appealing a denial. Florida law provides a specific pathway for holding insurers accountable when they fail to act honestly and fairly, and that pathway has teeth. But the rules changed significantly after the 2023 tort reform, and those changes are still shaping how cases play out in 2026. Whether you’re a homeowner whose hurricane damage claim was underpaid or a business owner fighting a commercial loss denial, having Florida bad faith insurance law explained clearly can help you understand your rights and your options for pushing back.
Understanding Florida’s Duty of Good Faith
Every insurance policy in Florida carries an implied obligation: the insurer must deal with its policyholders in good faith. This isn’t just a nice idea or an industry best practice. It’s a legal duty, and violating it exposes the insurance company to significant liability beyond the original claim amount.
The concept is straightforward. When you pay your premiums, you’re entering a contract. The insurer agrees to cover certain losses in exchange for those payments. When a covered loss occurs and the insurer unreasonably refuses to pay, delays without justification, or manipulates the claims process to avoid its obligations, that behavior can constitute bad faith.
What makes Florida’s approach distinctive is that bad faith claims can result in damages that exceed the policy limits. If an insurer’s bad faith conduct causes you harm beyond the original claim amount, you can potentially recover those extra damages, including emotional distress and attorney fees in certain circumstances.
First-Party vs. Third-Party Claims
Understanding the distinction between first-party and third-party bad faith is essential because the legal standards and procedures differ for each.
A first-party bad faith claim arises when your own insurance company mistreats you. If you file a homeowner’s claim after a pipe bursts and causes $80,000 in water damage, but your insurer offers you $15,000 and refuses to budge, that’s a first-party dispute. You’re the policyholder making a claim directly against your own carrier.
A third-party bad faith claim involves liability insurance. Say someone is injured on your commercial property, and your liability insurer refuses to settle within policy limits even though liability is clear. If a jury then awards a verdict exceeding your coverage, your insurer’s failure to settle in good faith may have exposed you to personal liability. That’s third-party bad faith.
The procedures for pursuing each type differ. First-party claims require a specific statutory process (more on that below). Third-party claims are generally pursued under Florida common law and have their own set of requirements.
Common Examples of Bad Faith Conduct
Bad faith isn’t always obvious. Sometimes it looks like bureaucratic incompetence, but the pattern reveals something more deliberate. Here are behaviors that frequently give rise to bad faith claims in Florida:
- Unreasonably delaying claim investigation or payment without explanation
- Failing to communicate with the policyholder about the status of a claim
- Denying a claim without conducting a reasonable investigation
- Offering significantly less than what the claim is worth based on the policy terms
- Misrepresenting policy language to justify a denial
- Requiring excessive or unnecessary documentation to stall the process
- Failing to settle a third-party liability claim when liability is reasonably clear
I’ve seen clients at Payne Law describe situations where their insurer requested the same documents three or four times, each time claiming the previous submission was incomplete. That kind of repetitive stalling can be evidence of bad faith, especially when the insurer can’t articulate a legitimate reason for the delay.
The Legal Framework: Statutory vs. Common Law
Florida’s bad faith insurance framework operates on two parallel tracks: statutory law and common law. Each serves a different purpose, and the track you follow depends on the type of claim you’re pursuing.
The statutory track is codified in Florida law and applies primarily to first-party claims. It includes specific procedural requirements that must be followed before a lawsuit can be filed. The common law track developed through court decisions over decades and primarily governs third-party bad faith claims. Both tracks can result in significant damages, but the rules of engagement are different.
Florida Statute Section 624.155
This is the statute that gives Florida policyholders the right to sue their insurance company for bad faith. Under Section 624.155, any person may bring a civil action against an insurer that does not attempt in good faith to settle claims when it could and should do so.
The statute identifies specific violations that can trigger a bad faith claim:
- Not attempting in good faith to settle claims when, under all the circumstances, it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for the insured’s interests
- Making claims payments to policyholders or beneficiaries not accompanied by a statement setting forth the coverage under which payments are being made
- Violating specific provisions of the Florida Insurance Code
One critical requirement under Section 624.155 is that the underlying claim must be resolved before a first-party bad faith lawsuit can proceed. This means you typically need to establish that the insurer owed you more than it paid, either through settlement, appraisal, or judgment, before the bad faith claim itself moves forward.
Common Law Requirements for Third-Party Claims
Third-party bad faith in Florida developed through case law rather than statute. The landmark case is Boston Old Colony Insurance Co. v. Gutierrez (1975), which established that an insurer has a duty to act in good faith when handling claims brought by third parties against its insured.
Under common law, the standard focuses on whether the insurer gave equal consideration to the interests of its insured when evaluating whether to settle a third-party claim. If a claimant offers to settle within policy limits and the insurer refuses without a reasonable basis, exposing the policyholder to an excess judgment, the insurer may be liable for the full judgment amount, even the portion exceeding policy limits.
Courts evaluate the totality of the circumstances, including whether the insurer adequately investigated the claim, whether it informed the policyholder about settlement opportunities, and whether its decision-making process was reasonable. The insurer doesn’t have to accept every settlement demand, but it must act with the same care it would use if it were spending its own money.
Impact of 2023 Tort Reform (HB 837)
House Bill 837, signed into law in March 2023, represented the most significant overhaul of Florida’s civil litigation landscape in decades. While the bill addressed many areas of tort law, its impact on bad faith insurance claims has been substantial and is still playing out in courtrooms across the state in 2026.
The stated goal was to reduce frivolous lawsuits and lower insurance premiums for Florida residents. Whether it has accomplished those goals is debatable, but the changes to bad faith law are concrete and affect how claims are evaluated and litigated.
New Standards for Negligence and Bad Faith
HB 837 introduced a modified comparative negligence standard, replacing Florida’s pure comparative negligence system. Under the new rule, a plaintiff who is found to be more than 50% at fault cannot recover damages. While this applies broadly to negligence cases, it has indirect effects on bad faith litigation because it changes the calculus for underlying claims.
The reform also created new considerations for how insurers handle settlement opportunities. Under the new framework, insurers can point to their own settlement offers as evidence of good faith. If an insurer makes a settlement offer within a reasonable time and the policyholder or claimant rejects it, that offer can be used defensively in a subsequent bad faith action.
| Pre-HB 837 (Before 2023) | Post-HB 837 (2023 – Present) |
|---|---|
| Pure comparative negligence | Modified comparative negligence (51% bar) |
| One-way attorney fee statute available | One-way attorney fee statute repealed |
| Insurer’s settlement offers less relevant to bad faith defense | Insurer’s timely settlement offers can serve as bad faith defense |
| Bad faith claims frequently paired with fee-shifting | Policyholders bear own attorney fees in most cases |
| Broader discovery into insurer’s claims handling | Some courts limiting scope of discovery post-reform |
Changes to Attorney Fee Recovery
This is arguably the most impactful change for policyholders. Before HB 837, Florida’s one-way attorney fee statute (Section 627.428) allowed policyholders who prevailed against their insurer to recover attorney fees. This provision was a powerful equalizer because it meant insurance companies couldn’t simply outspend policyholders in litigation.
HB 837 repealed Section 627.428. As of 2026, policyholders generally cannot recover attorney fees from their insurer simply by winning a coverage dispute. This changes the economics of bad faith litigation significantly. Without fee-shifting, smaller claims may not justify the cost of litigation, and insurers know this.
There are exceptions. Attorney fees may still be recoverable under certain circumstances, including some bad faith claims brought under Section 624.155. But the landscape has shifted, and policyholders need to understand this reality before deciding how to proceed. Consulting with an experienced insurance claim attorney is essential to evaluate whether your specific situation still supports a viable path to fee recovery.
Procedural Requirements for Filing a Claim
Filing a bad faith insurance claim in Florida isn’t as simple as calling a lawyer and filing a lawsuit. The state imposes specific procedural prerequisites, and failing to follow them can get your case dismissed before it ever reaches a courtroom.
The Civil Remedy Notice (CRN) Process
Before you can file a first-party bad faith lawsuit under Section 624.155, you must file a Civil Remedy Notice with the Florida Department of Financial Services. This is a mandatory prerequisite, not optional.
The CRN must be filed on the department’s official form and must include specific information:
- The specific statutory violations you’re alleging
- The facts and circumstances giving rise to the violation
- The specific language in the insurance policy relevant to the claim
- A statement that the notice is filed pursuant to Section 624.155
Filing the CRN correctly matters. If you fail to include the required information or cite the wrong statutory provisions, the insurer can argue the notice is deficient, potentially delaying or derailing your claim. I’ve seen cases where policyholders attempted to file CRNs on their own and made errors that cost them months of additional waiting. Working with a firm like Payne Law that handles these filings regularly can help ensure the CRN is properly prepared.
The CRN is filed electronically through the Department of Financial Services’ online portal. Keep copies of everything you submit, and note the date and confirmation number.
The 60-Day Cure Period for Insurers
Once the CRN is filed, the insurer has 60 days to “cure” the alleged violation. In practice, this means the insurance company has 60 days to pay the claim, resolve the dispute, or otherwise address the bad faith conduct described in the notice.
If the insurer cures the violation within that 60-day window, you cannot proceed with the bad faith lawsuit. The cure provision gives insurers one last chance to do the right thing before facing litigation.
Here’s what this looks like in practice: if your insurer underpaid a $200,000 roof damage claim by $150,000, and you file a CRN, the insurer has 60 days to pay the remaining $150,000 (plus any applicable interest). If they pay, your bad faith claim is effectively resolved. If they don’t pay or only partially cure the violation, you can proceed with filing suit after the 60-day period expires.
During this 60-day period, document everything. If the insurer contacts you, note the date, time, and substance of the communication. If they make a partial payment, record the amount. If they do nothing, that silence itself becomes evidence.
One important timing note: the 60-day clock starts when the Department of Financial Services sends the CRN to the insurer, not when you file it. There can be a short delay between your filing and the department’s transmittal.
Damages and Compensation in Bad Faith Lawsuits
The damages available in a Florida bad faith case can far exceed what was originally at stake in the underlying insurance claim. This is what gives bad faith law its power and why insurers take these claims seriously.
In a successful first-party bad faith action, you can potentially recover the full amount of your original claim (if it wasn’t already paid), consequential damages caused by the insurer’s bad faith conduct, and in some cases, emotional distress damages. If your insurer’s refusal to pay a $300,000 fire damage claim forced you to take out high-interest loans, miss mortgage payments, or relocate your family, those additional losses may be recoverable.
For third-party bad faith claims, the damages can be even more dramatic. If an insurer’s failure to settle within policy limits results in an excess judgment against the policyholder, the insurer can be held liable for the entire judgment, even amounts far exceeding the policy limits. A $100,000 liability policy could result in a $2 million bad faith judgment if the insurer unreasonably refused to settle.
Punitive damages are theoretically available in Florida bad faith cases, though courts impose a high bar. You’d need to demonstrate that the insurer’s conduct was willful, wanton, or malicious, not merely negligent or unreasonable. These awards are rare but not unheard of.
One thing to keep in mind post-HB 837: the economics of bad faith litigation have shifted. Without automatic fee-shifting in most cases, the potential recovery needs to justify the cost of litigation. For claims involving significant dollars, bad faith remains a powerful tool. For smaller disputes, the calculus is different, and you should discuss the financial realities candidly with your attorney before committing to litigation.
Frequently Asked Questions
How long do I have to file a bad faith claim in Florida?
The statute of limitations for a bad faith insurance claim in Florida is generally five years. However, the clock doesn’t start until the underlying claim is resolved, since you must establish the insurer’s liability on the original claim before pursuing bad faith. Don’t wait until the last minute. Evidence becomes harder to gather as time passes, and witnesses’ memories fade.
Can I file a bad faith claim if my insurer eventually paid my claim?
Yes, potentially. If the insurer unreasonably delayed payment and that delay caused you damages, you may still have a bad faith claim even if the original claim was ultimately paid. The key question is whether the delay was unreasonable and whether it caused you harm.
Does bad faith insurance law apply only in Florida?
No. Most states have some form of bad faith insurance law, though the specifics vary widely. States like Georgia, Colorado, New York, North Carolina, South Carolina, and Texas each have their own statutes and case law governing insurer conduct. Florida’s framework is among the most detailed, but if your claim involves property in another state, the law of that state may apply.
Do I need a lawyer for a bad faith claim?
Technically, you can file a CRN and pursue a bad faith claim on your own. Practically, these cases involve complex legal standards, strict procedural requirements, and well-funded opposition. Insurance companies have entire legal departments dedicated to defending bad faith claims. Going it alone is risky.
Protecting Your Rights Going Forward
Florida’s bad faith insurance laws exist because the state recognized a fundamental imbalance: insurance companies have more money, more lawyers, and more time than the people they insure. The legal framework, even after the 2023 reforms, provides real tools for policyholders who’ve been treated unfairly. Understanding how these laws work, from the CRN filing process to the 60-day cure period to the types of damages available, puts you in a stronger position to fight back.
If you’re dealing with a denied, delayed, or underpaid insurance claim and suspect your insurer isn’t acting in good faith, the team at Payne Law can help you evaluate your situation and understand your options. With offices in Florida and Colorado, and clients served across multiple states, they work on contingency, meaning you pay nothing unless they recover compensation on your behalf. Get in touch to discuss your claim.
