Most states have laws protecting policyholders from bad faith and unfair dealing from insurance companies. Luckily, Florida is one of those states. The Unfair Claims Settlement Practices Act ensures that insurance companies address, investigate, and satisfy all claims in a thorough and a timely fashion, and settle claims fairly. Insurers must set forth a reasonable process for evaluating claims, and let the policyholder know if any extra information is needed before denying a claim due to a lack of said information.When a claim is denied, a written explanation is required. Additionally, insurance companies must avoid certain deceptive practices, from engaging in false advertising, to misleading the policyholder about the terms of his or her policy, to making any false statement or entry, among many other requirements and prohibitions.
In addition to general prohibitions and requirements, the law also addresses specific situations policyholders may find themselves in. For example, auto insurers may not impose or request additional premiums or cancel policies, or issue a non-renewal notice because of any traffic infraction when adjudication has been withheld and no points have been assessed pursuant to 318.14(9) and (10). [However, this subparagraph does not apply to traffic infractions involving accidents in which the insurer has incurred a loss due to the fault of the insured.]
In short, this law recognizes that insurance companies are in an advantageous position compared to policyholders. The legislation evens the playing field, so to speak, between insurers – who are very knowledgeable in their fields and in the business of making money – and policyholders, who may find themselves in vulnerable positions when purchasing policies and navigating disputes.
Okay – this is all great, but what will actually happen to the insurance companies if they violate any of these provisions? What incentive is there for them not to engage in these deceptive practices? If the department suspects an insurance company has violated this law, a hearing is held in front of a hearing officer or administrative judge. If the hearing officer or judge determines the insurance representative has engaged in a deceptive act or practice, the department can require the violator to cease and desist that act. Under certain circumstances, the department or office may even suspend or revoke the person’s certificate of authority, license or eligibility for any license if he or she knew (or reasonably should have known) he was violating this law. If an insurer violates the cease and desist order, he or she may be subject to some hefty fines.
If you have a bad faith and/or insurance dispute claim, it is best to seek the advice of an attorney. An attorney with experience in these types of disputes can determine whether the insurance company acted fairly and whether you are entitled to any compensation.