Policyholders in Florida have the legal right to expect insurance companies to act in good faith when processing or investigating claims or making payments. This is because insurance companies often have the upper hand because of their vast resources, experience, firsthand knowledge of policy wording and negotiating strength. Should an insurance company fail to act in good faith, it may be possible for an affected policyholder to take appropriate legal action.

If it is suspected that homeowners' insurance claims, for instance, weren't handled properly, affected parties would need to have a case with the common elements that typically dictate what's considered a bad faith insurance claim. Some states broadly define actions by an insurer that are unreasonable or without proper cause while others view such claims as either a tort or breach of contract. However, there are generally two main elements a policyholder has to prove in order to take legal action because of a bad faith situation with an insurance provider.

First of all, policyholders are usually required to show they had a valid claim under the policy in question. There must also be documentation showing that the claim was denied by the insurer. In some instances, a final attempt to have a claim accepted has to be made before a lawsuit can be initiated. Secondly, the affected party needs to show that the reason for withholding payments or benefits was unreasonable. This determination is often based on the facts specific to the situation that existing at the time the claim was filed.

An attorney may also help policyholders pursue bad faith insurance claims based on unique state laws or statutes that provide additional protections against unfair or deceptive practices by insurance companies. A lawyer may also be able to take action on behalf of a client if an insurance provider failed to provide a valid reason for claim denial, failed to respond either way within a reasonable period of time even after the insured submitted additional documentation as requested, or failed to implement reasonable claim investigation practices or standards.

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