With all the different types of insurance that you are expected to hold, hearing the term “bad faith Insurance” may be confusing. You may believe that this is a type of insurance you are supposed to hold in order to protect yourself against “bad faith” (whatever that is). However, if you are worried that you will need to purchase another type of insurance in Florida, fear not. According to Investopedia, bad faith insurance is when an insurer attempts to not fulfill its obligations to the client.
Essentially, this situation occurs when an insurance company willfully misinterprets its own policy to not pay a claim. Insurers also are considered to be acting in bad faith when they do not disclose policy limitations or exclusions before a client purchases a policy. Some insurers who are acting in bad faith will also put extreme demands on a client who is trying to prove a loss.
Basically, bad faith insurance is when an insurance company is trying to prevent you from getting your rightful reimbursement for whatever type of claim that you are trying to make. It is possible for any kind of insurance company to operate with bad faith. This includes homeowner’s insurance, car insurance, health insurance, life insurance, and any other kind of insurance.
The good news is that the State of Florida, in general, is a very challenging jurisdiction in terms of insurance carriers acting in bad faith. Florida has very strong protections for its consumers in this vein. It is important that insurance clients in Florida understand the obligations of their insurance company and the totality of what they are entitled to.