Florida Bad Faith Insurance Claims: When Your Insurer Owes You More Than the Policy Limit
Last reviewed by Attorney Dean Levy on April 20, 2026. This page is reviewed quarterly to reflect current Florida personal injury law.
TL;DR
- Florida bad faith law is codified in Florida Statute 624.155.
- You must file a Civil Remedy Notice and wait 60 days first.
- Damages can exceed the underlying policy limits.
- Attorney fees are recoverable if you win the bad faith claim.
- Mere negligence by the insurer is not enough to prove bad faith.
Most personal injury cases settle within the at-fault driver’s policy limits, leaving the insurer’s bad-faith exposure as a theoretical issue. But when an insurer refuses a reasonable settlement demand within policy limits, and the case later results in a verdict that exceeds those limits, Florida law allows the insured (and sometimes the injured third party) to recover the excess from the insurer itself. This article explains how Florida bad faith claims work, what they require, and when they become a powerful tool against insurance company misconduct.
What is a bad faith insurance claim in Florida?
A Florida bad faith insurance claim is a legal action against an insurer that violates its duty of good faith and fair dealing toward its insured or claimants. The most common scenario: an insurer refuses to settle a clear liability claim within policy limits, then a jury returns a verdict exceeding those limits, leaving the insured exposed for the excess judgment.
Florida’s bad faith law is codified in Florida Statute 624.155, which created a statutory cause of action in 1982. Before the statute, Florida did not recognize first-party bad faith claims at all. Florida’s framework is now one of the most policyholder-friendly bad faith systems in the country.[1]
What conduct counts as bad faith under Florida law?
Florida Statute 624.155 lists specific acts that constitute bad faith. The core requirement is that the insurer failed to “attempt in good faith to settle claims when, under all the circumstances, it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for her or his interests.”
Specific bad faith conduct includes
- Failing to settle within policy limits when liability is clear and damages exceed limits
- Failing to communicate settlement offers to the insured
- Failing to investigate the claim adequately
- Making claim payments without identifying the coverage being applied
- Failing to promptly settle one portion of coverage to influence settlement under another
- Misrepresenting policy terms, coverage, or facts relating to the claim
- Failing to act with reasonable promptness on claim communications
Mere negligence is not enough. Florida Statute 624.155(5)(a) explicitly states “mere negligence alone is insufficient to constitute bad faith.” The conduct must rise above an honest mistake to a level of unreasonable, knowing, or reckless disregard of the insured’s interests.
What is the Civil Remedy Notice and 60-day cure period?
Before filing a bad faith lawsuit in Florida, the insurer must receive a Civil Remedy Notice (CRN) and a 60-day window to cure the alleged violation. The CRN is filed with the Florida Department of Financial Services on a specific form and must include the statute the insurer violated, the facts giving rise to the violation, any individuals involved, and relevant policy language.
If the insurer cures the violation within 60 days (typically by paying the claim or making a reasonable settlement offer), no bad faith action can proceed. If the insurer fails to cure, the bad faith claim ripens. The CRN process serves as a regulatory backstop and gives insurers a final opportunity to do the right thing before being sued.
What damages can I recover in a Florida bad faith claim?
Florida bad faith law allows recovery of damages that exceed the underlying policy limits — this is the central feature that makes bad faith claims powerful. Recoverable damages include the full excess judgment beyond policy limits, consequential damages reasonably foreseeable from the bad faith conduct, attorney fees and costs, and in some cases punitive damages.
The excess judgment recovery means an insured exposed to a $1 million verdict on a $100,000 policy can recover the $900,000 excess from the insurer that refused to settle within policy limits. The attorney fee recovery makes bad faith litigation economically viable even for smaller claims. The combination produces real consequences for insurer misconduct.[2]
| Damage Category | What’s Recoverable | Typical Examples |
|---|---|---|
| Excess judgment | Verdict amount over policy limits | $900K excess on $1M verdict / $100K policy |
| Consequential damages | Foreseeable harm from bad faith | Interest, lost business opportunities |
| Attorney fees and costs | All bad faith litigation expenses | Hourly fees, expert witness costs |
| Punitive damages | For egregious general-business-practice conduct | Multiple of compensatory damages |
| Interest | From date of bad faith conduct | Prejudgment interest at statutory rate |
When can punitive damages be awarded in bad faith cases?
Punitive damages in Florida bad faith cases require proof that the insurer’s misconduct occurred “with such frequency as to indicate a general business practice” and that the practice was willful, wanton, malicious, or in reckless disregard for the rights of insureds. This is a higher standard than the basic bad faith claim itself.
Punitive damages awards are constitutionally constrained and must be proportionate to the defendant’s conduct and financial condition. They are most often awarded against insurers with documented patterns of misconduct across multiple claims, established through internal documents, depositions of claims supervisors, and patterns evident in regulatory complaints.
What is the 90-day safe harbor under Florida bad faith law?
Florida Statute 624.155(4)(a) creates a safe harbor for liability insurers: if the insurer tenders the lesser of the policy limits or the amount demanded by the claimant within 90 days after receiving actual notice of a claim with sufficient supporting evidence, no bad faith action can be filed.
This safe harbor effectively gives insurers 90 days to evaluate a claim and pay policy limits when warranted. Insurers that fail to act within 90 days lose this protection, and the bad faith claim survives. If the insurer fails to tender within the 90-day window, the statute of limitations for bad faith is extended by an additional 90 days.
How long do I have to file a Florida bad faith claim?
The statute of limitations for Florida bad faith claims is generally 5 years from when the bad faith conduct occurred. This is longer than the 2-year personal injury statute because bad faith is treated as a statutory action under contract-like principles rather than as a personal injury tort.
The 5-year clock does not start until the bad faith conduct is complete and damages are quantifiable. In an excess-verdict scenario, the bad faith claim typically ripens when the verdict becomes final and the excess judgment is entered. Practical timelines are shorter than the statute suggests because evidence preservation and witness availability deteriorate quickly.
What is the difference between first-party and third-party bad faith?
First-party bad faith involves a dispute between the insured and their own insurer. Examples include a homeowner whose property insurer refuses to pay a covered claim, an injured driver whose UM/UIM carrier denies coverage, or a policyholder whose disability carrier delays benefits. Florida first-party bad faith claims arise only under the statute, not common law.
Third-party bad faith involves a dispute between an injured person and the at-fault party’s insurer. Examples include a car accident victim whose injuries exceed the at-fault driver’s policy limits when the insurer refused a reasonable settlement offer. Third-party bad faith claims can arise under both Florida statute and common law.
How does Stewart v. Mitsubishi Motors apply to bad faith cases?
Florida’s “totality of the circumstances” test, established through case law including Boston Old Colony Ins. Co. v. Gutierrez and refined in subsequent decisions, requires courts to evaluate all pertinent facts when assessing whether an insurer acted in bad faith. Florida does not follow the “fairly debatable” standard used in some states.
Factors courts consider include whether the insurer conducted a reasonable investigation, communicated with the insured timely, gave fair consideration to settlement opportunities, exercised diligent claim handling, and represented the insured’s interests against excess exposure. No single factor controls; the overall picture determines whether bad faith occurred.
How do bad faith claims affect my underlying personal injury case?
Bad faith claims typically arise after the underlying personal injury case concludes. The injured plaintiff first wins a verdict exceeding policy limits. The insured (or sometimes the assigned plaintiff) then pursues the bad faith claim against the insurer for the excess.
Strategic considerations begin during the underlying case. Demand letters within policy limits accompanied by sufficient evidence trigger the insurer’s bad faith exposure. Properly preserved demand documentation, evidence of liability, and damages support the later bad faith claim. Plaintiffs’ attorneys experienced in Florida bad faith litigation set up the underlying case to maximize bad faith options.
Insurance company refusing to settle fairly? Bad faith remedies may apply.
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Frequently Asked Questions
Yes, under Florida Statute 624.155. First-party bad faith claims against your own insurer cover unreasonable denial of coverage, delay in claim handling, lowball offers when liability is clear, and failure to investigate. You must first file a Civil Remedy Notice and give the insurer 60 days to cure.
A Civil Remedy Notice is the required pre-suit notice under Florida Statute 624.155. It is filed online through the Florida Department of Financial Services portal. The notice must identify the specific statutory violation, factual circumstances, individuals involved, and relevant policy language. The insurer has 60 days to cure.
Yes, in third-party bad faith claims. If the at-fault driver’s insurer refused a reasonable within-limits settlement offer and you obtained a verdict exceeding policy limits, you may recover the excess from the insurer. The insured driver often assigns their bad faith rights to the injured plaintiff.
Florida bad faith law makes attorney fees recoverable from the insurer if you win, which makes contingency-fee representation standard. Most plaintiffs pay nothing out of pocket. Dean Levy Injury Law handles bad faith claims on contingency with no fees unless we recover for you.
Breach of contract claims recover only what the policy required the insurer to pay. Bad faith claims recover damages that exceed policy limits when the insurer’s misconduct caused additional harm. Florida law allows breach of contract and bad faith to be pursued together, but separate judgments cannot be entered for the same damages.
The CRN process alone takes at least 60 days. The litigation itself typically takes 1 to 3 years. Cases involving excess verdicts in underlying personal injury matters may extend longer. Settlement is common once the bad faith exposure is established, often resolving for substantial amounts above the original policy limits.
If the insurer cures the violation within 60 days by paying the claim or making a reasonable settlement, the bad faith claim is foreclosed. This is the statute’s intended outcome — give insurers a final chance to do the right thing. Cure offers typically eliminate the bad faith exposure but resolve the underlying claim.
Related Topics
- What insurance adjusters don’t want you to know
- At-fault driver with no insurance (UM/UIM coverage)
- How much is my Florida personal injury case worth?
- Florida no-fault insurance explained
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