Following an accident that results in minor bodily injury or property damage, it is customary for parties to exchange insurance information, notify their insurers, and fix the damages. This trusts that both insurers are working toward an amicable settlement, allowing the parties to resume their lives. Automobile insurance is intended to make that process efficient and reliable. Most of us are willing to trust the progress of the settlement. In a rare instance, an insurance company is slow in processing a claim, or disputes what we think should be covered.
This process works best under normal circumstances. However, in Florida, when a party feels the need to reach out to a TV attorney touting his 6- or 7-digit track record of settlements, or when there is severe bodily damage or severe damage to property, normal progress comes to a halt. Progress toward an amicable settlement can run amok, especially in states like Florida where third-party “bad faith” lawsuits drain all sanity from the course of justice.
Here is how the third-party bad faith game is played in Florida. The plaintiff needs the discipline to direct all conversation through his attorney. The plaintiff’s attorney should reject settlement offers, for the full limit for which the defendant is insured. If the defendant is suspected of having meaningful wealth beyond the full limits of his insurance, plaintiff’s attorney should demand a notarized statement of the wealth. He may need that for funds beyond what the insurer will pay.
In addition, the plaintiff’s attorney should demand a settlement containing full limits and other items to be fulfilled within a ridiculously short period. The plaintiff’s attorney should not accept a response, even if all items sought are forthcoming. The plaintiff’s attorney may need to think up a reason for silence or for rejecting all offers. Ultimately, the plaintiff’s attorney will file a third-party “bad faith” lawsuit citing his reason for rejection as the foundation for bad faith. The last step will be to convince the jury that the insurance company does not need the money but the plaintiff needs and deserves it.
In the eight “bad faith” cases shown in Table 1 below, the average bad faith award exceeded $5.1 million. The average “full limit” amount for cases where that was known is $37,100. Four of the cases had a policy limit of just $10,000. One had a limit of $20,000. There were two cases with a $100,000 limit. In every case, the payoff for a win was lavish.
- Berges v. Infinity Insurance Company- 896 So. 2d 665, 29 Fla. L. Weekly S787
- Snowden ex rel Estate of Snowden v. Lumbermens Mut. Cas. Co., 358 F.Supp.2d 1125 (N.D. Fla. 2003)
- Goheagan v. American Vehicle Insurance Company 107 So.3d 433 (Fla. 4th. DCA 2012)
- Harvey v. GEICO General Insurance Co. SC17-85, 2018 WL 4496566 (Fla. Sept. 20, 2018)
- Hinson v. Titan Insurance Company 656 F. App’x 482 (11th Cir. 2016)
- Powell v. Prudential Property & Casualty Insurance Company 584 So. 2d 12 (Fla. 3d DCA 1991).
- United Automobile Insurance Co. v. Levine – 87 So.3d 782 (Fla. 3d DCA 2011).
- Novoa v. Geico Indemnity Co. 2013 WL 5614269 (11th Cir. 2013)
The Institute for Legal Reform conducted a survey showing that ” Florida families pay about $4,400 a year for goods and services due to the state’s lawsuit climate. Millions of dollars for a few, but millions of households suffer a $4,400 shortage in their budget.
The bottom line is that Florida’s bad faith reforms are needed to end the legal gaming by trial attorneys that pump up insurance costs, which ultimately puts pressure on consumer rates. Under the current rules, the winners are trial attorneys and the losers are Floridians.