Florida's property insurance market has undergone dramatic legislative restructuring since 2022. The dual rounds of tort reform—SB 2A (December 2022) and HB 837 (March 2023)—have reshaped the procedural and substantive landscape of first-party bad faith claims. For plaintiffs' counsel litigating hurricane claim denials or underpayments, Fla. Stat. § 624.155 remains the primary statutory vehicle—but its application post-reform requires careful navigation of sequencing requirements, adverse-adjudication prerequisites, and the insurer's expanded safe-harbor options.
I. The Statutory Framework: Fla. Stat. § 624.155
Section 624.155 creates a civil action against an authorized insurer for, among other things, "not attempting in good faith to settle claims 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." Fla. Stat. § 624.155(1)(b)(1). The statute also reaches claims payments made without coverage explanations and—critically in multi-peril hurricane contexts—failure to promptly settle a clear obligation under one policy portion in order to influence settlements under another.
The right of recovery is broad on its face: recovery extends to "damages which are a reasonably foreseeable result of a specified violation," including damages that "may include an award or judgment in an amount that exceeds the policy limits." Fla. Stat. § 624.155(11). Punitive damages are available where the violating acts occur with sufficient frequency to indicate a general business practice and are willful, wanton, malicious, or in reckless disregard of the insured's rights. Fla. Stat. § 624.155(8).
An important statutory clarification added by the 2023 reforms: mere negligence alone is insufficient to constitute bad faith. Fla. Stat. § 624.155(5)(a). This codifies what Florida courts had already recognized as the standard, but its explicit inclusion in the statute signals the legislature's intent to constrain claims built on sloppy claims handling rather than deliberate or reckless misconduct.
II. The Civil Remedy Notice: Procedure and Pitfalls
Condition precedent. Filing a Civil Remedy Notice (CRN) with the Florida Department of Financial Services is a mandatory condition precedent to any § 624.155 action. Fla. Stat. § 624.155(3)(a). The notice must be submitted on the Department's prescribed form and must state with specificity:
- The statutory provision violated, including the specific language of the statute;
- The facts and circumstances giving rise to the violation;
- The name of any individual involved in the violation;
- Reference to specific policy language relevant to the violation; and
- A statement that the notice is given to perfect the right to pursue the civil remedy.
The CRN is served on the insurer through the Department via a designated email address under Fla. Stat. § 624.422. The notice triggers the cure period; no suit may be filed until the cure period expires.
The 60-day cure period. After the insurer receives the CRN from the Department, it has 60 days to pay the damages or correct the circumstances giving rise to the violation. Fla. Stat. § 624.155(3)(c). If the insurer does so within 60 days, the bad faith action is extinguished. This cure right is not a formality—an insurer that pays disputed amounts within the cure window eliminates the § 624.155 claim entirely, which is why the sufficiency and specificity of the CRN are so important.
Appraisal restriction. The 2023 reforms added a restriction that a CRN "may not be filed within 60 days after appraisal is invoked by any party in a residential property insurance claim." Fla. Stat. § 624.155(3)(f). This provision is designed to give the appraisal process—a common dispute resolution mechanism in first-party property claims—space to resolve without the simultaneous pressure of a bad faith notice. Practitioners must track whether appraisal has been invoked and calendar the 60-day restriction accordingly before filing the CRN.
Tolling. The statute of limitations for the § 624.155 action is tolled for 60 days after the insurer receives the CRN and for 60 days after appraisal is invoked, if applicable. Fla. Stat. § 624.155(3)(e).
III. The Adverse Adjudication Requirement After SB 2A
The most significant change to first-party bad faith practice in Florida is the amendment to Fla. Stat. § 624.1551 effected by SB 2A (2022). Under current law, a bad faith lawsuit brought under § 624.155(1)(b) may not be filed until there has been a finding of breach of contract through adverse adjudication by a court of law.
This requirement substantially raises the threshold for initiating first-party bad faith litigation:
- No bad faith suit while coverage litigation is pending. The bad faith claim must await the resolution of the underlying coverage or breach-of-contract dispute. The practice of filing coverage and bad faith claims simultaneously in a single action is now constrained.
- Appraisal award is insufficient. Acceptance of a proposal for settlement or payment of an appraisal award does not constitute an "adverse adjudication" for this purpose. An insurer that pays an appraisal award cannot be sued for bad faith on the basis of that payment alone.
- Court judgment required. The adverse adjudication must come from a court—not an arbitrator, appraiser, or mediator. This sequencing requirement forces the litigation into two separate phases: first, a contract-based coverage claim to judgment; then, if judgment is obtained against the insurer, a second proceeding for bad faith.
The practical effect for hurricane claimants is significant: the timeline from storm to bad faith recovery has lengthened. Counsel should manage client expectations accordingly and be prepared to litigate the underlying coverage claim to judgment before the bad faith proceeding begins.
IV. Allstate Indemnity Co. v. Ruiz and Discovery in Bad Faith Litigation
Before the reforms redrew the procedural map, the Florida Supreme Court's decision in Allstate Indemnity Co. v. Ruiz, 899 So. 2d 1121 (Fla. 2005), established an important discovery principle that survives the 2022–2023 reforms: in first-party bad faith actions brought under § 624.155, work-product materials are discoverable. The Court held that an insurer cannot use the work-product doctrine to shield the contents of its claims file from discovery in a bad faith proceeding—the very question of how the insurer processed and evaluated the claim is the subject matter of the bad faith action, and the claim file is the primary evidence.
Ruiz arose from an insurer's deletion of a vehicle from the insured's policy and subsequent denial of a collision claim. After the underlying coverage issue was resolved, the Florida Supreme Court addressed a conflict among district courts over discovery rules in first-party bad faith actions and held that work-product protection does not apply to claims-file materials in the bad faith context. The Court later clarified—in a subsequent decision—that the attorney-client privilege was not entirely swept away by Ruiz, but that the claim investigation file and related materials remain open to discovery.
For practitioners building a hurricane bad faith case, Ruiz means the insurer's adjuster notes, internal damage evaluations, coverage opinions, reserve decisions, and communications about the claim are generally obtainable in discovery. This material often reveals the most probative evidence of bad faith: an insurer that internally acknowledges liability while externally denying or delaying the claim.
V. Substantive Bad Faith Elements in the Hurricane Context
Florida bad faith claims arising from hurricane losses typically involve one or more of the following fact patterns:
Systematic underpayment. The insurer retains an engineering firm or contractor that consistently produces low damage estimates, applies depreciation methodologies inconsistent with the policy, or excludes categories of covered damage. Obtaining competing estimates and internal claims-handling guidelines through discovery is essential.
Unreasonable delay. Failure to adjust the claim, inspect the property, or issue a coverage determination within a reasonable time after notice, particularly where the insurer is on notice of severe storm damage.
Improper coverage denials. Relying on exclusions (such as earth movement, water damage, or ordinance and law) that do not apply to the specific mechanism of loss, or mischaracterizing wind damage as flood damage (or vice versa) to deny a covered claim.
Failure to explain. Claims payments not accompanied by a statement setting forth the coverage basis for the payment. Fla. Stat. § 624.155(1)(b)(2). This provision is frequently overlooked but creates an independent basis for a § 624.155 notice when payment is made without a coverage explanation.
VI. The HB 837 Good-Faith Defense
One of HB 837's changes that affects first-party practice is the codification—in § 624.155(5)(b)—of a comparative fault mechanism in bad faith damages. The trier of fact may now consider whether the insured, claimant, or the insured's representative "did not act in good faith" in furnishing information, making demands, setting deadlines, or attempting to settle the claim. If so, the trier of fact may "reasonably reduce the amount of damages awarded against the insurer."
This provision does not create a separate cause of action against the insured, and it does not eliminate the insured's recovery—it merely authorizes a reduction. But it creates a significant litigation risk for cases where the insured or the insured's counsel made aggressive or unreasonable demands, refused reasonable adjustment procedures, or provided inaccurate information during the claims process. Counsel should document reasonable, good-faith compliance with all post-loss obligations.
VII. Practice Notes
Sequencing is everything. File the underlying coverage claim and litigate it to a court judgment before initiating the bad faith proceeding. Send the CRN only after the adverse adjudication is obtained—or, if the CRN is sent during the coverage litigation, be aware that § 624.155(3)(f) restrictions may apply if appraisal is pending.
Draft the CRN with precision. The CRN must specify every statutory provision violated and the factual basis for each violation. Courts have been unforgiving of vague or generalized CRNs. Treat the CRN as a pleading—it defines the scope of the bad faith action.
*Use Ruiz aggressively in discovery.* The claims file is open. Subpoena reserve records, audit logs, internal communications between the adjuster and supervisors, and any communications with the insurer's retained experts.
Document the good-faith record. Maintain detailed records of every communication with the insurer, every inspection request, and every demand made on behalf of the insured. The HB 837 good-faith comparative fault mechanism requires the insured's conduct to be above reproach.
VIII. Conclusion
Florida's first-party bad faith regime is more demanding post-2022 than it was during the pre-reform era of unlimited simultaneous coverage and bad faith litigation. The adverse adjudication prerequisite, the appraisal filing restriction on CRNs, and the HB 837 good-faith comparative fault provision all favor insurers procedurally. But the substantive law—§ 624.155's broad definition of bad faith, Ruiz's broad discovery rules, and the availability of extra-contractual damages and attorney fees—remains firmly on the insured's side when the underlying claim is solid and the claims-handling conduct is genuinely inadequate. Careful sequencing and disciplined pre-suit preparation are now essential.
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Informational only. Not legal advice. No attorney-client relationship is created by reading this post. Consult a licensed attorney in your jurisdiction.