(Matt Whitaker / New York Times)
The 2022 Florida Legislature enacted the property insurers' list of protections from bad faith claims in Florida. Topping the list was Florida's Bad Faith Statute, Subsection 624.155(1)(b). That was the property insurers' greatest concern, and it has been the greatest concern of every insurer doing business in Florida since it was enacted.
More precisely, the greatest concern to any insurer is the provision of the Bad Faith Statute that makes an insurer's bad-faith settlement conduct actionable in Florida. Fla. Stat. § 627.155(1)(b)1. Dr. Johnson once wrote that there is nothing like a person's impending execution to focus the mind. Well, in Florida, there is nothing like the prospect of being sued to focus the mind (including insurers).
In 2022, things changed for property insurers in Florida. Section 624.1551 was enacted to make exceptions for property insurers. Alone among insurance companies, property insurers were granted a return to the past as far as bad faith liability in Florida is concerned. It used to be that there was no such thing as bad faith exposure to any insurance companies issuing "first-party" policies or insurance contracts for coverage claims by their policyholders, such as health insurance companies and fire insurance carriers.
Section 624.1551 changed the focus but only for property insurers. Now people asking for "extracontractual" damages first must prove that the property insurer is liable for a breach of contract. Here's the thing: Bad-faith settlement conduct in Florida was never a breach of the insurance contract.
You thought the calendar said 2023? Not in Florida, at least not for property insurers. Their focus is on the past, and welcome to it. You can stay as long as you don't try to sue a property insurer for bad faith.
The author's article, Consumers Had No Voice: Changes to Property Insurers' Laws in Florida, is scheduled for publication this week by Thomson Reuters' Insurance Litigation Reporter.
Please read the disclaimer. ©2023 Dennis J. Wall. All rights reserved.
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