Bad faith is an available remedy to policyholders in Florida against their homeowners insurance carrier if that insurance company engages in unlawful conduct as described in Fla. Stat. §626.9541. Typically this is available after the policyholder has already prevailed against their insurance company in an underlying lawsuit regarding the original insurance claim for damages. Bad faith typically provides extra-contractual damages, including punitive damages, for the insurance companies lack of good faith in handling, adjusting, and paying insurance claims.
Many people may not know that Florida’s largest home insurer, Citizens Property Insurance Corporation, unlike all other Florida homeowner insurers, is immune from prosecution for bad faith. This is because of the immunity provided to state agencies in Fla. Stat. §627.351(6)(s)1. However, in what could be a landmark decision in Florida as it relates to property insurance, the First District Court of Appeal in Perdido Sun Condominium Association. Inc. v. Citizens Property Insurance Corporation certified a question of great importance to the Supreme Court of Florida that could have a huge impact on policy holders and Citizens Property Insurance, Florida’s largest property insurer:
It may be years before the Supreme Court of Florida addresses this question. However, should the Supreme Court agree with the First District, this decision could have a huge impact on how Citizens Property Insurance Corporation functions as a homeowner insurer in Florida.
The First District Court’s opinion can be found here.