In order to bring a bad faith claim in Florida, the following three elements need to be established: (1) the insurer’s liability for coverage needs to be determined; (2) the extent of the insured’s damages needs to be determined; and (3) it must be established that the insured placed the insurance company on notice. See Florida Statute §624.155(a). This statute provides a civil remedy in cases where the insurance company fails to settle its policyholder’s claim in good faith or where the insurer commits any one of the several unfair claims handling practices identified in Florida Statute §626.9541(1)(I).
In Demase v. State Farm Florida Insurance Co., 239 So.3d 218 (Fl. App. 5th Dist. 2018) the court found that an insured could satisfy elements one and two without having to bring a lawsuit and then prevail in some form on a breach of contract claim against the insurance company. The court found that the insured, in bringing a bad faith claim against the insurer, could obtain a determination the insurer’s liability and the extent of damages by either litigation, arbitration, settlement, stipulation, or through the payment of full policy limits. In that regard, the property insurer’s payment of policy limits to the insured after expiration of the 60-day cure period following acceptance of the insured’s civil remedy notice by the Department of Financial Services would be sufficient to constitute a determination of the insurer’s liability and the extent of damages under the statute. The insured could then proceed with a statutory bad faith lawsuit against the insurer. The court found that payment of policy limits after the expiration of the 60-day cure period was the functional equivalent of a determination of liability and the extent of damages.