Florida Bad Faith Statute: Notice, Safe Harbor, and Damages

The Florida bad faith statute, Section 624.155 of the Florida Statutes, gives policyholders and injured claimants the right to sue an insurance company that failed to handle a claim fairly and honestly, with damages that can exceed the original policy limits. It is the strongest tool Florida law offers for holding an insurer accountable, but recent reforms under SB 2-A (2022) and HB 837 (2023) have added procedural hurdles that anyone considering a claim needs to work through carefully.

What Counts as Bad Faith

The statute defines bad faith as an insurer’s failure to settle a claim “when, under all the circumstances, it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for her or his interests.”¹ That language is broad on purpose, and Florida courts have applied it to several recurring patterns of insurer conduct.

Unreasonable refusal to settle within policy limits when liability is clear. An insurer that turns down a within-limits offer without good reason risks being held responsible for the full excess judgment.
Failing to investigate. In Berges v. Infinity Insurance Co., 896 So. 2d 665 (Fla. 2004), the Florida Supreme Court found that an insurer’s delay in evaluating a claim and failure to communicate with the claimant supported a bad faith determination. Insurers are expected to gather relevant facts, review medical records or repair estimates, and follow up promptly.
Misrepresenting policy terms. Providing false or incomplete information about coverage, exclusions, or claim procedures is treated as evidence of misconduct.
Unreasonable delays in payment. Sitting on a valid claim, repeatedly requesting documents already provided, or slow-walking a file when the evidence supports payment.

The 2023 reforms drew a line under this list: mere negligence is not bad faith.² An honest mistake in processing a claim, without more, will not support a claim under the statute. The conduct has to reflect something beyond ordinary error, though it need not be intentional wrongdoing.

First-Party and Third-Party Claims

Florida recognizes two types of bad faith claims, and the prerequisites are different for each.

A first-party claim runs against your own insurer. You file a homeowners claim, the carrier lowballs or denies it, and you sue. The Florida Supreme Court held in Blanchard v. State Farm Mutual Automobile Insurance Co., 575 So. 2d 1289 (Fla. 1991), that a bad faith claim does not ripen until there has been a determination that the insurer was obligated to pay the underlying claim. For property insurance, SB 2-A went further: you now need an adverse court judgment against the insurer before a bad faith lawsuit can proceed. An appraisal award or an accepted offer of judgment is not enough, though the gap between an insurer’s appraiser’s final estimate and the appraisal award can still serve as evidence of bad faith later.

A third-party claim arises when an insurer fails to protect its own policyholder from an excess judgment in a liability case. In Boston Old Colony Insurance Co. v. Gutierrez, 386 So. 2d 783 (Fla. 1980), the Florida Supreme Court held that insurers owe a duty to protect policyholders from excess judgments by making reasonable settlement decisions.³ If the injured party offers to settle within limits, the insurer refuses, and a jury later returns a verdict beyond those limits, the insurer can be on the hook for the full judgment.

How to Bring a Claim

Resolve the Underlying Dispute

Bad faith is about how the insurer handled a valid claim, so the underlying claim has to be resolved first. For property insurance, that means a court judgment finding a breach of the insurance contract. For other lines of coverage, the Blanchard rule controls: there must be a final determination that the insurer owed benefits before the bad faith action can proceed.

File a Civil Remedy Notice

Once the underlying claim is resolved, you must file a Civil Remedy Notice (CRN) with the Florida Department of Financial Services. This is a condition precedent, and skipping it or getting it wrong will get the case dismissed. In Juliano v. Citizens Property Insurance Corp., 300 So. 3d 1164 (Fla. 3d DCA 2020), an improperly drafted CRN led to exactly that result.⁴

The CRN goes on the department’s official form and must include:

The specific statutory language allegedly violated — the actual text of the provision, not just a section number.
A detailed factual account of what the insurer did or failed to do.
The names of any adjusters, managers, or other personnel connected to the violation.
The relevant policy language. Third-party claimants who have requested a copy of the policy and not received it are excused from this requirement.

The department forwards the CRN to the insurer, which then has 60 days to cure the violation. If it pays the claim or fixes the problem within that window, the bad faith action is extinguished.¹ One more restriction: for residential property insurance claims, the CRN cannot be filed within 60 days after any party invokes appraisal.²

The 90-Day Safe Harbor for Liability Claims

HB 837 added a significant off-ramp for insurers on liability claims. Under Section 624.155(4)(a), a bad faith action cannot be brought if the insurer tenders the lesser of the policy limits or the amount demanded by the claimant within 90 days of receiving actual notice of the claim, provided the claim comes with sufficient evidence supporting the amount.²

If the insurer misses the 90-day window, the claimant cannot use that fact against it. The existence of the safe harbor and the point that paying within it would have prevented the claim are both inadmissible in the subsequent bad faith action. When the insurer fails to tender within 90 days, the statute of limitations on the bad faith claim is extended by an additional 90 days.

Damages You Can Recover

Section 624.155(11) allows recovery of “damages which are a reasonably foreseeable result” of the insurer’s violation, and those damages can exceed the policy limits.¹ This is what gives the statute its force. In Perera v. U.S. Fidelity & Guaranty Co., 35 So. 3d 893 (Fla. 2010), the Florida Supreme Court reaffirmed that an insurer is responsible for the entire excess judgment when its failure to settle in good faith produces a verdict beyond policy limits.

Consequential damages are also recoverable. If the insurer’s misconduct caused you to lose your home to foreclosure, damaged your credit, or forced a business to close, those losses are recoverable so long as they were reasonably foreseeable.

The 2023 reforms added a counterweight: the claimant also has a duty of good faith. The insured, claimant, or their representative must act in good faith in furnishing information, making demands, setting deadlines, and attempting to settle.² This does not create a separate cause of action against the claimant, but if a jury finds the claimant did not act in good faith, it can reduce the damage award.

Punitive Damages

Punitive damages are available but hard to win. Section 624.155(8) requires two showings: the bad faith conduct must have occurred “with such frequency as to indicate a general business practice,” and the acts must be willful, wanton, and malicious, or in reckless disregard for the insured’s rights.¹ A single incident, no matter how egregious, will not support a punitive award. A pattern is required. A claimant seeking punitives must also post the costs of discovery in advance, and if no punitive award results, the insurer recovers those costs.

Defenses Insurers Rely On

A few defenses come up repeatedly.

Genuine coverage dispute. The most common defense is that the insurer had a reasonable basis for its position. If coverage was genuinely debatable on the policy language or the facts, the claim weakens considerably. In Dadeland Depot, Inc. v. St. Paul Fire & Marine Insurance Co., 483 F.3d 1265 (11th Cir. 2007), the court found that differences in legal interpretation regarding coverage did not rise to bad faith.⁵ The “mere negligence is insufficient” language from the 2023 reforms reinforces this ground.

CRN defects. A CRN that omits the required statutory language, lacks the factual detail called for by the form, or was filed during a prohibited window can sink the entire action. Florida courts enforce the CRN requirements strictly.

Claimant’s own conduct. Under the 2023 amendments, the insurer can point to artificially short deadlines, withheld information, or demands structured to manufacture bad faith rather than settle the claim. A jury finding on this issue reduces the recovery.

Advice of counsel. The insurer may argue it relied on its attorney’s advice. To hold, the insurer has to show it disclosed all relevant facts to counsel, reasonably believed the advice was correct, and gave the policyholder’s interests at least equal weight to its own. The defense does not apply where the insurer denies coverage and uses that denial as the basis for refusing a reasonable settlement offer.

No actual damages. A bad faith claim requires proof of specific financial harm. Inconvenience and frustration are not enough. If the insurer eventually paid in full and the policyholder cannot identify monetary losses caused by the delay or denial, the action may fail for lack of damages.

Deadline to File

Bad faith is a statutory cause of action, so the five-year limitations period under Section 95.11 of the Florida Statutes applies. The clock generally does not start until the underlying insurance claim is resolved, because the bad faith action cannot ripen before then. On liability claims where the insurer fails to tender within the 90-day safe harbor, the limitations period is extended by an additional 90 days.²

When the Statute Does Not Apply

Two common situations sit outside Section 624.155 because federal law occupies the field.

Health or disability coverage through an employer-sponsored benefit plan governed by ERISA is generally preempted. ERISA’s preemption clause supersedes state laws that “relate to any employee benefit plan,” and its civil enforcement provision under Section 502 limits available remedies. State insurance regulations can survive under ERISA’s savings clause if they specifically target the insurance industry and affect the insurer-insured relationship, but self-funded employer plans fall outside that exception entirely. If your employer self-insures its health plan rather than buying a policy from a carrier, Florida’s bad faith statute almost certainly does not apply.

Flood insurance under the National Flood Insurance Program is the other boundary. Federal courts have generally held that claims arising from the terms of a Standard Flood Insurance Policy are governed by federal law, preempting state bad faith remedies. Claims about how the policy was sold or procured, as opposed to how a claim was handled, may still proceed under state law.

1
Florida Senate. Florida Statutes 624.155 – Civil Remedy
2
Online Sunshine. Florida Statutes 624.155 – Civil Remedy
3
Justia Law. Boston Old Colony Insurance Co. v. Gutierrez, 386 So. 2d 783 (Fla. 1980)
4
Third District Court of Appeal of Florida. Juliano v. Citizens Property Insurance Corp
5
Justia Law. Dadeland Depot Inc v. St. Paul Fire and Marine Insurance Co, 483 F.3d 1265