Bad faith 101
The term “bad faith” is thrown around quite a bit in personal injury cases. Unfortunately, it is not well understood by most people or most lawyers. While I certainly am not an expert in this area of law, I think it is important to explain the basic concept as it relates to personal injury cases.
All of us must carry some type of auto insurance in order to get a license in Florida. When we purchase insurance, we are placing our “good faith” in the insurance company to act in our best interest in the event a claim is made against us. In the personal injury context, this comes up if and when unfortunately, we cause an injury crash.
What happens when you cause an injury crash? Well, most likely, the injured person will seek legal representation. That lawyer will then send a letter of representation to your insurance carrier. How do they get this information? They get it from the police report.
Once your insurance company gets the letter of representation, they will open up a claim and contact you. They are now going to represent you in the claim that is being made against your policy.
This is the backdrop for bad faith. If your insurance company fails to pay your policy limits on a claim, the lawyer takes the case to a jury, and the jury awards more than your policy limit, you would then be personally liable for the excess amount awarded by the jury (the difference between the jury verdict and your policy limit). Because your insurance company failed to protect you, you may now have an action for bad faith.
I hope this information is useful and I would encourage you to seek out the advice of a specialist in bad faith law should you feel the need to do so.