Every year, active and former armed services members and their families trust the United Services Automobile Association (USAA) to handle their insurance, banking, and investment needs. The San Antonio-based business began selling policies to military members in 1922.
USAA deserves credit for providing insurance services for the nation’s armed forces, but it cannot be forgotten that it’s also a business. Last year, Fortune 500 ranked the company as one of the nation’s top revenue earners. The insurer made $30.6 billion for the first time in 2017. USAA made a huge profit even after paying record-setting settlements to victims of Hurricanes Harvey, Irma, and Maria.
USAA doesn’t enjoy that kind of success by always paying claims. Sometimes the company’s refusal to pay a claim is legitimate. Unfortunately, however, there are also times when USAA should pay a claim, but doesn’t, or when its adjusters try to get away with offering settlements far lower than claimants deserve. When this sort of bad behavior meets certain criteria under Florida law, it can be deemed “insurance bad faith” that entitles claimants to additional compensation for injuries the failure to pay a claim causes.
Dolman Law Group’s team in Clearwater understands the challenges that personal injury victims face after an accident, particularly when it comes to chasing an insurance company to pay a legitimate claim. In this blog post, you’ll learn how bad behavior on the part of USAA and other big insurance companies can make it unnecessarily difficult to collect on an insurance claim, and how the team at Dolman Law Group may be able to help if you find yourself stuck in a dispute with USAA over a claim that you think they should have paid. Call us at (727) 451-6900 to find out.
USAA, like other insurers, has an obligation to honor the terms of the insurance policies it issues. All insurance contracts contain an implied covenant of good faith and fair dealing.
Good faith includes fulfilling any contractual duties insurers owe to their policyholders, including, most importantly to their customers, paying benefits that are due. Florida law also requires insurance carriers to fairly and impartially process their customers’ claims. The insurer must complete the following steps to process claims:
- Investigate the policyholder’s proof of damages
- Verify the claim
- Inspect the area where losses occurred
- Examine the insured person’s coverage
- Appraise the damage amount
- Deny or settle the claim
Insurance bad faith occurs when insurers knowingly fail to uphold their contractual responsibilities to insureds. Policyholders may be entitled to sue insurance carriers that refuse to honor the terms of an insurance contract and/or fail to abide by statutory obligations in processing insurance claims. An insurance carrier that acts in bad faith can be held liable for damages that may exceed the policy’s limits, including:
- Statutory penalties
- Liability for legal judgments against the insured
- Consequential economic losses suffered by the insured
- Punitive damages
- Accumulated interest
- Attorneys’ fees.
Florida Motorists Sue USAA for Bad Faith Practices
Last year, USAA settled a class action lawsuit in Florida by agreeing to pay automobile policyholders $39 million. Almost 70,000 customers belonged to the class that sued USAA after for its practice of improperly reimbursing customers for insurance claims related to totaled cars or trucks.
Attorneys filed the lawsuit in 2013 on behalf of customers on insurance policies underwritten by USAA for Florida residents from October 2008 and October 2016, alleging the company had acted in bad faith by excluding excluded sales tax when it issued settlement checks to policyholders to buy new vehicles. The suit contended USAA withheld the tax until members paid a fee, in accordance to its policy, but subsequently failed to reimburse the full sales tax to 70 percent of policyholders entitled to reimbursement.
Under the settlement, USAA’s Florida auto policy customers will now receive 100 percent of their totaled vehicle’s value, plus 8 percent interest. USAA also agreed to rewrite its insurance policy terms for Florida residents, so that they will no longer have to wait for sales tax reimbursement, but will instead receive payment up front in connection with payment of their claim. USAA did not admit fault in the case.
What Is a First-Party Bad Faith Claim?
Florida law recognizes two categories of insurance bad faith claims: first-party and third-party.
First-party bad faith claims are legal actions customers bring against their own insurance companies. Policyholders sue insurers that don’t make a good faith attempt to pay a claim. Florida litigants who believe they are victims of insurance bad faith may pursue legal action under the state’s insurance bad faith statute, which requires insurance carriers to act fairly and honestly when investigating and adjusting claims, regardless of the insurer’s financial interest in not paying a claim.
At Dolman Law Group, we commonly represent clients in one of the following insurance bad faith scenarios:
- An insurance company refuses to settle a claim. Florida law allows residents to sue insurers that don’t make a good faith attempt to pay legitimate claims. In the typical case, carriers refuse to settle despite clear evidence the claim is valid.
- The carrier delays paying a settlement. Residents may also bring an insurance bad faith action when an insurer unnecessarily delays processing or paying insurance benefits.
- The insurer pays policyholders without providing an accompanying statement. The printed statement must explain the payments provided, so that the insurance customer knows whether they have received all of the benefits available under the policy.
Our Firm’s Experience With First-Party Bad Faith Claims
The Dolman Law Group fights hard to get our clients justice when an insurers refuse to honor the terms of an insurance contract and/or violate Florida’s insurance bad faith statute. Our experienced attorneys work with the insured to resolve first-party bad faith claims.
Our firm often tackles first-party bad faith claims involving car accident victims. Under Florida’s “no-fault” insurance law, all drivers must carry Personal Injury Protection (PIP) insurance. Regardless of the fault of the parties in a car accident, each driver’s own PIP insurance is that driver’s primary insurance for injuries sustained in the accident. PIP insurance should be paid promptly and correctly, but that does not always happen.
One indicator of bad faith in these situations is an insurer’s willful failure to adequately investigate a personal injury claim merely because of the size of an associated property damage claim. “I see insurance companies evaluating claims based on the property damage involved,” attorney Matthew Dolman said during an interview. “It doesn’t even make sense. They’ll see a property damage claim of maybe $500 to $700, and decide it’s impossible that my client could have been injured.” He continued, “Yet, they don’t hire a biomechanical expert, nor do they hire or retain a medical doctor to determine how severe or significant the injury is, or whether it’s a permanent impairment.”
Dolman explained that insurance adjusters are lay people who often lack medical expertise to assess claimants’ injuries, and therefore rely on the improper indicator of property damage to guide their assessment of a personal injury claim. The Dolman Group has seen this bad faith practice repeated in numerous cases involving USAA, Allstate, GEICO, and other insurers.
In one such insurance bad faith matter Dolman Law Group has handled, our client underwent lumbar fusion surgery at a local orthopedic clinic after sustaining a spinal cord injury in a car accident. The insurance company contested the claim, arguing that the victim’s injuries were minor and only offered a $2,000 settlement. We successfully demonstrated argued that an impact sustained in the car accident caused our client’s injuries, and recovered a $325,000 settlement for our client.
Third-Party Bad Faith Claims in the Sunshine State
Third-party insurance bad faith cases involve liability insurance. They arise from situations where carriers fail to settle a third party’s claim against the policyholder arising from the policyholder’s negligence or other covered conduct.
Florida law authorizes third parties to take legal action when insurers engage in a variety of unfair or deceptive trade practices. These may include
- Failure to adopt or incorporate standards to investigate claims.
- Misrepresentations of factual information about policy provisions.
- Refusal to acknowledge or act promptly on communications about claims.
- Denial claims without a reasonable investigation based on available data.
In one common third-party bad faith scenario, the insurer has, but declines, the opportunity to settle a third party claim against its policyholder for the policy limits. If the third party subsequently sues the policyholder and wins a judgment for more than the policy limits, leaving the policyholder on the hook for the remainder, the policyholder may have an insurance bad faith claim against the insurer for refusing to settle for the policy limits with the third party.
In another common scenario, the third party who sues a policyholder for injuries resulting from the policyholder’s negligence or other covered conduct may have a claim against the insurer for its bad faith failure to process or pay a claim (similar to the scenarios in first-party coverage cases mentioned above).
Florida third-party insurance bad faith claimants must select either a statutory or common law remedy when they pursue claims against an insurer. They cannot pursue both types of damages at the same time. Statutory claims comprise the majority of third-party claims.
Insurance bad faith litigants who opt for statutory remedies must also submit the insurer’s violation of the Florida Department of Financial Services before launching a bad faith claim. An insurer has 60 days from receipt of the notice to address violations before action can proceed. Common law third-party lawsuits do not need a civil remedy notice.
Our Firm Helps Litigants Win Their Third-Party Bad Faith Claims
Our firm has achieved successful outcomes against major insurers like USAA. In 2016, a father and son drove home after leaving their jobs at a Broward shopping mall. A large pickup truck plowed into the rear of their SUV while they waited at a red light. The powerful crash resulted in severe vehicular damage.
When the father left his SUV, he noticed bruising on his knees. He couldn’t walk and worried that he had broken his legs in the accident. An ambulance arrived and rushed him to Memorial Hospital West. Emergency room doctors couldn’t find any broken bones. Yet, the patient complained about back pain.
His son didn’t receive immediate medical care, but he had neck pain. They left the hospital. The pair later sought follow-up care at a spinal specialist’s office. Doctors diagnosed the father with herniated discs in his lower back. His son had a bulging disc in his neck. Both men received medications and injections to relieve their pain. Although the son’s aches diminished, the treatment didn’t help his father, who needed surgery.
Dolman Law Group sought to have the responsible party’s insurer cover the family’s damages. Our law firm filed a lawsuit when the party and its insurer ignored our demand. After some pre-trial maneuvering, we were able to convince the insurer to settle. The father received a $650,000 settlement. His son received $125,000.
Damages Claimants Can Receive in Insurance Bad Faith Cases
Florida allows successful litigants to collect damages in insurance bad faith cases. Plaintiffs can collect statutory, economic, and non-economic damages caused by the insurer’s failure to abide by its obligations to policyholders and beneficiaries. Those damages may even include damages for emotional or psychological suffering the insurance company’s bad faith caused, if the claimant can prove:
- The insurer’s bad-faith conduct prevented the claimant from receiving health care benefits quickly.
- This failure aggravated the insured’s medical or psychological conditions.
- The victim suffered emotional distress related to the aggravated condition.
Trust the Dolman Law Group to Handle Your Clearwater USAA Insurance Bad Faith Claim
When an insurance company acts in bad faith, it can impact your ability to pay for medical expenses and other bills. Has USAA refused to pay your claim? Call the professionals at Dolman Law Group in Clearwater. Our experienced insurance attorneys know how to fight to get a USAA insurance claim settlement paid. Contact us to schedule a free consultation or call (727) 451-6900.
Dolman Law Group
800 North Belcher Road
Clearwater, FL 33765