Insurance companies have a strict, legal fiduciary duty to act in your best interest. When you purchase an auto policy, you are paying for protection. If an insurance company unreasonably delays your claim, fails to investigate properly, or refuses to settle a claim to protect their own profit margins, they are acting in “Bad Faith.” In Florida, bad faith litigation is incredibly complex and was recently overhauled by major tort reform. Navigating these changes is critical to forcing massive insurance conglomerates to pay the settlement value you are owed.
First-Party vs. Third-Party Bad Faith
There are two types of bad faith claims in Florida:
- First-Party Bad Faith: This occurs when you sue your own insurance company (for example, if your Uninsured Motorist carrier wrongfully denies your claim after you were hit by a driver with no insurance). You must file a Civil Remedy Notice giving the insurer 60 days to fix the issue before you can sue.
- Third-Party Bad Faith: This occurs when you sue the at-fault driver. If the at-fault driver has a $25,000 policy, and you offer to settle your catastrophic $500,000 claim for that $25,000 limit, the insurance company has a duty to accept it to protect their driver from being sued for the remaining $475,000. If the insurer stubbornly refuses to pay the $25,000 limit, and you subsequently win a $500,000 verdict at trial, the insurance company can be hit with a bad faith judgment forcing them to pay the entire $500,000 themselves.
The 2023 Tort Reform (HB 837) Changes
For years, bad faith lawsuits were a powerful tool for plaintiffs. However, in March 2023, Governor DeSantis signed House Bill 837 into law, creating massive new protections for insurance companies.
1. The 90-Day Safe Harbor:
Under the new law, an insurance company is completely immune from a bad faith lawsuit if they tender the policy limits (or the amount demanded, whichever is lower) within 90 days of receiving actual notice of the claim accompanied by sufficient medical evidence. This gives insurers a massive 3-month window to sit on your claim without fear of legal retaliation.
2. Negligence is No Longer Bad Faith:
HB 837 codified that “mere negligence” by an insurance adjuster is no longer enough to constitute bad faith. The plaintiff must prove the insurer actively acted solely in their own self-interest.
3. The Insured’s Conduct Matters:
Previously, bad faith trials focused exclusively on the bad behavior of the insurance company. Now, the law allows juries to scrutinize the conduct of the injured victim and their attorney. If you failed to provide medical records promptly or set unreasonable deadlines, your bad faith claim can be reduced or dismissed.
Because the landscape of Florida Bad Faith law heavily favors insurers in 2026, you must utilize highly accurate data to ensure every demand you make is perfectly documented and mathematically sound.