Bad Faith Insurance in Florida: A 2026 Policyholder's Guide

When a Florida insurance company delays, underpays, or denies a legitimate claim, policyholders often ask the same question: is that legal, or is the carrier acting in bad faith? Florida law recognizes both first-party bad faith (against your own insurer) and third-party bad faith (an insurer's failure to protect its insured from an excess judgment). The rules changed materially after House Bill 837 (2023) and continue to shape claims in 2026. This guide, written from a Miami insurance-dispute lawyer's perspective, explains what bad faith actually means under Florida law, how the Civil Remedy Notice process works, and what policyholders should document from day one.

What Is 'Bad Faith' Under Florida Law?

Every insurance policy in Florida carries an implied duty of good faith and fair dealing. When an insurer breaches that duty in the way it handles a claim — for example, by failing to investigate, ignoring evidence, or lowballing a clear loss — the policyholder may have a separate cause of action for bad faith, in addition to the underlying breach-of-contract claim.

Bad faith comes in two forms in Florida:

• **First-party bad faith.** You (the policyholder) sue your own insurance company for unreasonably handling your claim — common in property, homeowners, PIP, and UM/UIM disputes. This claim is statutory, created by Florida Statute § 624.155.

• **Third-party bad faith.** A liability insurer fails to settle a claim against its insured within policy limits when it had the opportunity, exposing the insured to a judgment above the limits. This claim is grounded in Florida common law dating back to the Florida Supreme Court's decision in *Boston Old Colony Ins. Co. v. Gutierrez*, 386 So. 2d 783 (Fla. 1980).

The Statutory Framework: § 624.155 and § 626.9541

Florida Statute § 624.155 is the centerpiece of first-party bad-faith law. It allows an insured, or someone with a valid assignment of benefits, to bring a civil action against an insurer for any of the following:

• Not attempting in good faith to settle claims when it could and should have done so, had it acted fairly and honestly toward the insured with due regard for the insured's interests

• Making claims payments without a statement of the coverage under which payment is being made

• Failing to promptly settle a claim under one portion of a policy in order to influence settlement under another portion

• Violating certain unfair claim settlement practices listed in § 626.9541(1)(i), such as misrepresenting policy provisions, failing to acknowledge communications with reasonable promptness, or denying claims without conducting a reasonable investigation

The Civil Remedy Notice (CRN) — Your Mandatory First Step

Before any first-party statutory bad-faith lawsuit can be filed in Florida, the policyholder must file a Civil Remedy Notice of Insurer Violation with the Florida Department of Financial Services (DFS) and serve a copy on the insurer. This is not optional — it is a condition precedent to suit.

Key CRN requirements under § 624.155(3):

• The notice must be filed electronically with DFS on the state's official form

• It must identify the statutory provisions the insurer allegedly violated, the facts giving rise to the violation, and the specific policy language at issue

• The insurer has **60 days** from receipt to cure the violation by paying the damages or correcting the circumstances

• If the carrier cures within 60 days, no bad-faith action may proceed

• If the carrier does not cure, the policyholder may then file the bad-faith lawsuit

In 2026, DFS continues to publish CRNs in a searchable public database, and insurers use those filings to evaluate exposure. A well-drafted CRN — precise, statute-specific, and supported by the file record — often prompts payment within the cure period.

What Changed After HB 837 (2023)

House Bill 837, signed on March 24, 2023, made several changes to Florida bad-faith practice that remain in effect in 2026 and continue to shape how these cases are litigated:

• **General negligence claim required first, in third-party cases.** Under the amended § 624.155(1), mere negligence alone is not sufficient to constitute bad faith; the insurer's conduct must be evaluated under the totality of the circumstances.

• **Comparative bad faith by the claimant.** Courts may now consider whether the insured, claimant, or their representative acted in good faith in furnishing information, making demands, and attempting to settle. A claimant's unreasonable conduct can reduce damages.

• **90-day settlement safe harbor in liability cases.** If a liability insurer tenders the lesser of the policy limits or the amount demanded within 90 days after receiving actual notice of a claim supported by evidence sufficient to determine liability and damages, no bad-faith action lies based solely on failure to pay policy limits.

• **One-way attorney fees repealed in most property cases.** Florida's long-standing one-way attorney-fee statutes (§§ 627.428 and 626.9373) were largely repealed for property-insurance disputes. Policyholders should read their current policy for any contractual fee-shifting language.

These reforms did not eliminate bad-faith claims — they reshaped the record insurers and policyholders must build.

Common Examples of Bad-Faith Conduct

Not every claim denial is bad faith. A carrier that pays what the policy owes, in a reasonable time, based on a reasonable investigation, has met its duty even if the policyholder disagrees with the number. Conduct that Florida courts have recognized as potential bad faith includes:

• Failing to conduct a reasonable investigation before denying a claim

• Misrepresenting policy provisions or exclusions to the insured

• Ignoring or lowballing a repair or medical estimate without a competing expert opinion

• Failing to communicate a settlement offer to the insured in a liability case

• Requiring duplicative documentation to delay payment

• Denying coverage based on grounds later abandoned in litigation

• Failing to advise the insured of an excess-judgment risk when policy limits are clearly inadequate

Whether conduct rises to bad faith is a fact-specific inquiry decided by a jury based on the totality of the circumstances.

First-Party vs. Third-Party Bad Faith — Why the Distinction Matters

First-Party Bad Faith

The insured is fighting their own carrier over a claim for benefits the policy owes them: hurricane damage, water loss, PIP medical bills, UM/UIM damages. The claim is statutory under § 624.155, requires a CRN, and the underlying coverage or damages case usually must be resolved (with a determination that the insurer owed the disputed amount) before the bad-faith case can proceed.

Third-Party Bad Faith

A liability insurer had the chance to settle a claim against its insured within policy limits, failed to do so, and a judgment above the limits was entered against the insured. Under *Berges v. Infinity Insurance Co.*, 896 So. 2d 665 (Fla. 2004), the insurer's duty is to handle the claim as if the policy limits did not exist. When the insurer breaches that duty, it can be liable for the entire excess judgment, not just the policy limits.

Damages Available in a Florida Bad-Faith Case

If a policyholder proves bad faith, § 624.155 allows recovery of:

• The amount of the claim actually owed

• Damages caused by the bad-faith conduct itself, which can include the full amount of an excess judgment in a third-party case

• Court costs

• Attorney's fees, as expressly provided in § 624.155(4)

• In cases of especially egregious conduct, punitive damages may be available under § 624.155(5), subject to the caps in § 768.73

What Policyholders Should Do from Day One

Bad-faith cases are won or lost in the claim file long before a lawsuit is filed. Steps that protect the record from the start of the claim include:

1. **Report the loss promptly and in writing.** Follow up any phone report with an email confirmation of what was reported and when.

2. **Keep a written communication log.** Note the date, adjuster name, subject, and outcome of every call.

3. **Send every document by a trackable method.** Certified mail, email with read receipts, or the carrier's portal with time-stamped screenshots.

4. **Request coverage decisions in writing.** If the adjuster is denying, delaying, or excluding coverage, ask for the specific policy provision relied on, in writing.

5. **Comply with all policy conditions.** Sworn proof of loss, examinations under oath, and document requests must be handled correctly; missing these conditions can undermine both the coverage and bad-faith claims.

6. **Get an independent estimate.** For property losses, an independent contractor or public adjuster estimate creates a competing number the insurer cannot ignore.

7. **Talk to a Florida insurance-dispute attorney before filing the CRN.** A poorly drafted CRN can waste the 60-day cure period and give the carrier a roadmap to defend the file.

Bottom Line

In 2026, Florida bad-faith law remains a powerful tool for policyholders — but the rules under § 624.155, § 626.9541, and HB 837 are technical, and small procedural mistakes can be fatal to a claim. If a Florida insurance company has denied, delayed, or underpaid your legitimate claim, the practical path is to preserve every document, get an independent damages estimate, and consult a licensed Florida insurance-coverage attorney before filing the Civil Remedy Notice. The Farber Law Firm handles first-party property, PIP, UM/UIM, and third-party bad-faith matters throughout South Florida, and offers free, no-obligation consultations for insurance-dispute cases.