Whether most people realize it or not, there are certain entities that they are not only wary of interacting with, but which also cause them to feel a certain powerlessness in the event of any conflict. While regulatory agencies or law enforcement agencies certainly fit this category, so too do certain corporate enterprises, such as credit card companies and, of course, insurance companies.
While this feeling is certainly understandable given the resources and sheer size of these organizations and enterprises, it's always important for people to understand that they are extended considerable rights and protection under both state and federal law. This is especially true in relation to insurance companies.
Indeed, Florida has long recognized the right of insured persons to pursue what are known as bad faith lawsuits against insurance companies for failing to live up to the promises set forth in the policies issued.
Any discussion of the Sunshine State's stance toward insurance bad faith must be prefaced, however, by an examination of how insurance policies are actually viewed in the eyes of the law.
At its core, an insurance policy is viewed as a contract in which the insurer promises to cover the insured -- or the consumer -- for losses caused by specified perils in a particular area in exchange for consideration (i.e. payment of premiums).
This treatment is significant as it establishes that regardless of the type of coverage being provided by the insurer -- home, auto, life, etc. -- they owe the insured two major contractual duties in exchange for their premium payments:
- A duty to indemnify: This is an obligation to issue the necessary payments to either the insured or a beneficiary for valid claims.
- A duty to defend: This is an obligation to legally defend the insured against claims filed by third parties that fall within the ambit of their policy.
We'll continue this discussion in a future post, exploring more about first- and third-party bad faith claims.
In the meantime, consider speaking with a skilled legal professional to learn more about you options if you believe that your insurer has failed to live up to its obligations.