Citizens Property Insurance Immunity for Bad Faith Failure to Settle May Be Coming to An End

Working with property insurance companies to settle cases can be frustrating. When it comes to settling cases, it sometimes seems like they will do as much as they can not to settle. That is the situation in a recent Florida case involving Citizens Property Insurance.

In Perdido Sun Condominium Association, Inc. v. Citizens Property Ins. Corp., (2014), the Florida courts are dealing with a claim of bad faith failure to settle. A condo operated by Perdido Sun was damaged in a hurricane in 2004. The condo was insured by Citizens and Perdido made a claim for coverage. Perdido recovered benefits under their policy with Citizens but later brought a lawsuit for bad faith failure to settle the claim. Perdido claims that Citizens did not make a good faith effort to settle its insurance claim. Citizens claimed immunity due to its affiliation with the State of Florida. The trial court granted the company immunity and dismissed the case.

Perdido appealed the ruling claiming that Citizens could not be immune in this case because it had committed a willful tort by acting in bad faith. The First District Court of Appeals agreed with Perdido. The court decided that bad faith constituted a willful tort as Citizens violated their duty to policy holders to act in good faith when settling the claim. The court held that Citizens could not be immune from the suit because it had committed a willful tort.
Citizens appealed the ruling and the case is now up for final decision in the Florida Supreme Court. The decision in this case could have a large impact on Florida property insurance law. If the Supreme Court finds for Perdido, policy holders may finally be able to sue Citizens for bad faith conduct, for which Citizens has previously been immune. Citizens is a government owned insurance company functioning as an insurer of last resort. Many Floridians who cannot obtain property insurance from other companies depend on Citizens for coverage. This ruling may allow those insured who had been the victim of bad faith failure to settle to sue Citizens where they could not before.

Pekar Law is a full service Tampa, Florida property insurance law firm. If you have a property insurance issue that you would like to discuss please call us for a free initial consultation.