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What Is “Bad Faith” In Insurance Negotiations?


When you’ve been injured and are negotiating a settlement claim with your insurance, you are trusting they will negotiate with you in good faith. However, sometimes insurance companies will negotiate in bad faith. If an insurance company is negotiating in bad faith, they will not offer you a fair settlement. So to protect yourself, you will need to fight against bad faith negotiations so you are treated fairly.

What Is Good Faith?

Good faith is the premise that your insurance company will honor your contract. If you pay your insurance premiums on the agreement that you will receive a set amount of coverage, you are owed that coverage. If an insurance company is practicing good faith, they will honor that agreement. Good faith also applies to third party insurance companies. Third party insurance companies are also supposed to keep the commitment to their insured, and thus, extend fair coverage to their victims.

What Is Bad Faith?

Bad faith is when the insurance company is not keeping up their end of the agreement and instead is offering you an unfair settlement. Bad faith is not simply disagreeing on the settlement figure. Instead it is when you don’t believe that the negotiations meet the specifics of your contract or you don’t believe the insurance company is operating above board. Bad faith can also apply to third party companies, but since they don’t have the same duty to the victim, the victim will have to prove there have been lies or fraud that has prevented a fair settlement.

Examples Of Bad Faith

There are many things an insurance company can do that would be considered bad faith. Here are some of the more common examples:

  • Denying a valid claim without providing a reason
  • Refusing to pay for a valid claim
  • Not adequately investigating a valid claim
  • Failure to communicate important information to the claimant
  • Refusing requests for documentation of their decisions
  • Delaying the payment of a claim within a reasonable timeframe
  • Offering a settlement significantly less than the value of the claim
  • Failure to enter negotiations over the claim
  • Not disclosing policy limits
  • Misrepresenting the law or the details of the policy
  • Threatening policyholders or third party victims

What To Do If You Believe Your Insurance Company Is Negotiating In “Bad Faith”

The first thing you need to do is tell your insurance adjuster you believe them to be negotiating in bad faith. If that gets no response, then you should write a formal letter to the insurance company accusing them of bad faith negotiations. If there still is no response, you need to hire a personal injury attorney to represent you in the negotiations and help you prove the insurance company is operating in bad faith.

How Do You Prove Bad Faith?

Proving bad faith can be really difficult because it is proving intent. In order to prove bad faith you must show the facts, circumstances, and any relevant documents that the company is operating in bad faith. This is why it is essential to have a personal injury lawyer on your side. Experienced personal injury attorneys regularly negotiate insurance claim settlements, so they know when an insurance company is operating in bad faith. Plus, a good attorney knows exactly what kind of documentation you will need to prove your case.

What Happens If You Prove Bad Faith?

In the State of Florida, if you can prove bad faith in insurance settlement negotiations, you may be entitled to damages above the value of your initial claim. You may be awarded damages that occurred as a result of the bad faith denial, emotional distress damages, and even punitive damages if you can prove intention. So it is very important that if an insurance company is operating with bad faith, you have a qualified attorney to help you prove your case.

Our knowledgeable attorneys at , Goldman, Babboni, & Walsh have more than 100 years of combined experience settling personal injury cases in Florida. So we know exactly what can happen if an insurance company negotiates in bad faith and can you help prove your bad faith claim. So if you think your insurance company is operating in bad faith, don’t let them steamroll you into an unfair settlement. Instead, contact our attorneys to help.

Attorney David Goldman has a strong belief that everyone should be treated fairly and those with the means should do what they can to bring justice in all areas of our society. That belief has led him to help Florida's injured from being taken advantage of by corporations and insurance companies. Since 1989 David Goldman has been fighting for the rights of Floridians both as an attorney and by personally supporting our community.

What Is “Bad Faith” In Insurance Negotiations?

Goldman Babboni Fernandez
Murphy & Walsh




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