Bad Faith

What it means

Bad faith is an insurer's failure to treat its own policyholder fairly and honestly when handling a claim. An insurance policy is a contract, but Florida law treats it as more than an ordinary contract because the insurer holds nearly all of the power once a loss occurs: it controls the investigation, the timeline, the valuation, and the money. Bad faith describes what happens when a carrier abuses that power, for example by denying a covered claim without a reasonable basis, dragging out the process, or paying far less than the loss is worth in the hope the homeowner gives up or settles cheap.

The doctrine exists to put a check on that imbalance. Because the insurer controls the money and the key decisions after a disaster, Florida imposes a duty to act in good faith and to settle claims when, under all the circumstances, it could and should have done so. Mere negligence alone is not enough to be bad faith. What the law targets is conduct that is unreasonable: unjustified denials, unexplained delay, and deliberate lowball offers that ignore the true scope of damage.

In a Florida property claim, bad faith is not something a homeowner sues over out of the blue. It follows a specific statutory path. Under Fla. Stat. 624.155, the claimant must first give 60 days' written notice of the violation, filing a Civil Remedy Notice of Insurer Violation with the Department of Financial Services and putting the insurer on notice of exactly what it did wrong. The insurer then has 60 days to cure: if it pays the damages or corrects the circumstances that gave rise to the violation within that window, no action may lie. Only if the carrier fails to cure does the door to a bad-faith lawsuit open.

Layered on top of that is Fla. Stat. 627.70152, which governs suits under a residential or commercial property policy generally. As a condition precedent to filing suit on the underlying claim, a policyholder must provide the department with written notice of intent to initiate litigation at least 10 business days before filing, and the notice must itemize the disputed amount and the presuit settlement demand. These two statutes work together: 627.70152 sets the pre-suit rules for the property claim itself, and 624.155 provides the separate remedy when the insurer's handling of that claim crosses into bad faith.

In practice

On a real Florida claim, bad faith rarely looks like a flat refusal to pay. More often it hides inside the ordinary-looking claims process. A carrier assigns an adjuster who inspects quickly, writes an estimate that omits code-required work or entire damaged areas, and issues a check below the deductible or barely above it. The homeowner, unaware of the true scope, cashes it and moves on. When a public adjuster or contractor later documents the full loss, the gap between what was owed and what was paid becomes the evidence of unreasonable underpayment.

Common carrier tactics tied to bad faith include prolonged silence after a proof of loss, repeated requests for the same documents to reset internal clocks, unexplained reliance on an in-house engineer to attribute storm damage to wear and tear, and anchoring with an early lowball offer. Delay is itself a lever: the longer a family waits with a damaged roof or a mold problem, the more pressure builds to accept whatever is offered. None of these, standing alone, automatically proves bad faith, but a documented pattern of them is exactly what the Civil Remedy Notice is designed to capture.

The practical playbook is to build a paper trail before threatening litigation. That means a fully documented, independently supported scope of loss, dated correspondence, and a clear demand. The Civil Remedy Notice under 624.155 then forces a decision point: the insurer either pays the correct amount within the 60-day cure window, which is often the fastest route to a fair outcome, or it declines and exposes itself to a bad-faith claim with damages that may exceed the policy limits. The pre-suit notice under 627.70152 runs on a parallel track for the underlying property suit, so both notices are usually coordinated by counsel and the adjusting team.

Related guide: Denied Insurance Claim in Florida? What to Do Next