News Item Detail
No Bad-Faith Reform for Florida Lawmakers this session
Business groups in Florida were hoping for some reform to the state's bad-faith laws during the 2012 legislative session. However, those hopes ended suddenly when a legislative committee voted by a one vote margin to kill the bill that would have placed additional restrictions on lawsuits.
The House Civil Justice Committee rejected the bill that would have provided insurance companies with more time to settle claims in order to avoid third party bad faith lawsuits.
A bad-faith claim arises when and insurer fails to settle a third-party's claims against the insurer's policyholder, therefore exposing the insured to monetary damages in excess of their policy limits. The third party can also sue the insurance company in cases where they believe the insurance company failed to settle the claim in good faith.
Rep. Kathleen Passidomo, who sponsored the bill, believes that the state needs new restrictions in order to help reign in the cost of insurance for individuals as well as small businesses. Business groups and insurance companies believe that the current law only benefits attorneys as it seems to provide an incentive to avoid settling claims in order to sue for negligence.
Under the proposed bill, anyone seeking to file a bad-faith lawsuit would have to give a sixty day notice to the state's Department of Financial Services and the authorized insurer before filing suit. If the insurer decided to pay damages or the policy limit, then it would be shielded from the bad-faith claims.
The bill's opponents argued that the passing of this bill gives insurance companies little incentive to settle the claims in a timely manner. Claimants would be forced to wait for an extended sixty day window in order to have their claims settled. In an instance where there is limited insurance available but severe injuries to the claimant, this would be detrimental. It may force a claimant to settle their claims for smaller amounts in order to receive needed money to continue treatment or to help with expenses.
While many people feel that there are too many lawsuits in the state, many also feel that this bill is not a solution to that problem. In the long run, it will hurt the injured party and help the insurance companies to avoid paying claims.
For more information, please go to: www.insurancejournal.com/news/southeast/2012/01/27/232952.htm
The House Civil Justice Committee rejected the bill that would have provided insurance companies with more time to settle claims in order to avoid third party bad faith lawsuits.
A bad-faith claim arises when and insurer fails to settle a third-party's claims against the insurer's policyholder, therefore exposing the insured to monetary damages in excess of their policy limits. The third party can also sue the insurance company in cases where they believe the insurance company failed to settle the claim in good faith.
Rep. Kathleen Passidomo, who sponsored the bill, believes that the state needs new restrictions in order to help reign in the cost of insurance for individuals as well as small businesses. Business groups and insurance companies believe that the current law only benefits attorneys as it seems to provide an incentive to avoid settling claims in order to sue for negligence.
Under the proposed bill, anyone seeking to file a bad-faith lawsuit would have to give a sixty day notice to the state's Department of Financial Services and the authorized insurer before filing suit. If the insurer decided to pay damages or the policy limit, then it would be shielded from the bad-faith claims.
The bill's opponents argued that the passing of this bill gives insurance companies little incentive to settle the claims in a timely manner. Claimants would be forced to wait for an extended sixty day window in order to have their claims settled. In an instance where there is limited insurance available but severe injuries to the claimant, this would be detrimental. It may force a claimant to settle their claims for smaller amounts in order to receive needed money to continue treatment or to help with expenses.
While many people feel that there are too many lawsuits in the state, many also feel that this bill is not a solution to that problem. In the long run, it will hurt the injured party and help the insurance companies to avoid paying claims.
For more information, please go to: www.insurancejournal.com/news/southeast/2012/01/27/232952.htm
February 21, 2012, 12:00 am
