Informational only. Not legal advice. No attorney-client relationship is created by reading this post. Consult a licensed attorney in your jurisdiction.
Uninsured and underinsured motorist coverage is the policy provision Florida drivers are most likely to actually use — and the coverage that generates the most insurer resistance. When a carrier delays, underpays, or denies a UM/UIM claim, it faces the same statutory bad faith framework that governs third-party liability claims, but with procedural mechanics that differ in important respects. Mastering the pre-suit sequence under Fla. Stat. § 624.155 and § 627.727 is essential to preserving the full range of remedies.
The Statutory Framework: § 627.727
Section 627.727, Florida Statutes, is the UM/UIM coverage statute. It provides that no motor vehicle liability insurance policy providing bodily injury liability coverage shall be issued in Florida unless it also provides uninsured motorist coverage "for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness, or disease, including death, resulting therefrom." Fla. Stat. § 627.727(1).
The statute creates a mandatory offer framework. Uninsured motorist coverage must be offered at the same limits as the bodily injury liability coverage, and the insured must affirmatively reject the coverage in writing or select lower limits. If a rejection form is not properly executed, UM coverage exists by operation of law at the liability limits. The rejection must be by the named insured, and it must be in writing on a form compliant with § 627.727.
UM Coverage as First-Party Coverage
The critical doctrinal feature of UM/UIM coverage is that the insured's own carrier stands in the position of the tortfeasor for purposes of the claim. The insured presents the claim to the carrier, the carrier evaluates it, and if the carrier fails to pay what is owed, the insured sues the carrier directly. This first-party posture means that bad faith in UM/UIM claims is governed by § 624.155 rather than the common law alone — a distinction with significant procedural consequences.
The Florida Supreme Court definitively resolved the accrual question for UM/UIM bad faith claims in Blanchard v. State Farm Mutual Automobile Insurance Co., 575 So. 2d 1289 (Fla. 1991): a bad faith claim under § 624.155 arising from a UM/UIM dispute does not accrue until the underlying contractual obligation — the carrier's obligation to pay UM/UIM benefits — has been established. The insured must first resolve the coverage and damages dispute (either by judgment or agreed payment) before the bad faith action accrues.
The § 624.155 Civil Remedy Notice in UM/UIM Cases
Because UM/UIM bad faith is a first-party statutory bad faith claim, the Civil Remedy Notice is a mandatory condition precedent. The CRN must: (1) be filed with the Department of Financial Services and served on the carrier; (2) specify the statutory provisions violated; (3) describe the specific acts, circumstances, and conditions constituting the violation; and (4) allow the carrier 60 days to cure.
In UM/UIM cases, the CRN mechanics interact with the bifurcated nature of UM litigation. The carrier cannot be sued for bad faith until after the underlying UM/UIM claim is resolved in the insured's favor. In practice, the CRN is typically filed either: (a) after the insured obtains a verdict on the UM/UIM claim; (b) after the carrier tenders an amount the insured accepts as satisfaction of the UM benefits; or (c) in some cases, during the pendency of the underlying UM action if the carrier's conduct is so egregious that counsel believes the bad faith evidence is fully developed.
HB 837 (2023) expanded the CRN requirement to both first-party and third-party bad faith actions, harmonizing an area where there had been prior ambiguity. The 60-day cure period now applies uniformly.
Drafting the UM/UIM CRN. The CRN in a UM/UIM case should specify: the date the demand for UM/UIM benefits was made; the documentation provided; the carrier's response (or failure to respond); any dispute as to coverage, liability, or damages; and the specific subsection of § 624.155(1)(b)1 violated. A vague CRN that merely recites the statutory language will not satisfy the specificity requirement. The CRN should also identify any violations of § 626.9541 — the unfair claims settlement practices statute — to which § 624.155(1)(a) cross-references.
Discovery Under Allstate Indemnity Co. v. Ruiz
The landmark discovery ruling for UM/UIM bad faith cases is Allstate Indemnity Co. v. Ruiz, 899 So. 2d 1121 (Fla. 2005). The Florida Supreme Court in Ruiz eliminated the prior distinction between discoverable materials in first-party and third-party bad faith actions, holding that in a first-party bad faith case under § 624.155, "all materials, including documents, memoranda, and letters, contained in the underlying claim and related litigation file material that was created up to and including the date of resolution of the underlying disputed matter and pertain in any way to coverage, benefits, liability, or damages, should also be produced." Ruiz, 899 So. 2d at 1129-30.
The scope of Ruiz discovery is broad: the entire claims file, adjuster notes, diary entries, electronic communications, supervisor instructions, reserve logs, and litigation file materials up through the date of resolution of the underlying UM/UIM claim are discoverable. Work product protection does not shield this material in the bad faith context. Attorney-client privilege is preserved for attorney communications that are not about the processing of the underlying claim.
Practically, Ruiz discovery in UM/UIM cases should include requests for:
- The complete claims file for the UM/UIM claim from inception through resolution
- All reserve logs and reserve change documentation
- All communications between adjusters, supervisors, and coverage counsel prior to the resolution of the underlying claim
- Any internal training materials governing UM/UIM claims evaluation
- All documentation of the insurer's liability investigation of the tortfeasor
- Any PDA records, electronic logs, or computer diary entries related to the claim
Stacking and Rejection Forms
UM coverage stacking — the ability to add the UM limits of multiple vehicles insured under the same policy to create a higher recovery ceiling — is permitted in Florida under certain circumstances. An insured may stack UM coverage when multiple vehicles are insured under the same policy and the additional premium has been paid for each vehicle's UM coverage. However, carriers routinely include anti-stacking endorsements that purport to limit recovery to the highest available single limit.
The enforceability of anti-stacking endorsements turns on whether the rejection of stacking was effectuated through a proper written waiver under § 627.727. An invalid rejection form is a common basis for expanding available coverage. Counsel reviewing UM claims should examine: (1) whether the rejection form complied with the statutory requirements; (2) whether it was signed by the named insured (not an agent or other party); (3) whether the form clearly disclosed the stacking waiver in a manner adequate to constitute informed rejection; and (4) whether the anti-stacking endorsement limits intra-policy or inter-policy stacking.
Demand Letter Practice
In UM/UIM cases, the demand letter to the carrier serves as the trigger for both the underlying benefits dispute and the bad faith sequence. A well-drafted UM/UIM demand letter should:
Document the tortfeasor's liability. The insured's carrier is entitled to know the liability basis for the claim. Include the police report, witness statements, any photographs, and a clear statement of the negligence theory.
Document the damages. Include all medical records and billing, wage loss documentation, expert opinions on future medical treatment, and any functional impairment evidence. Because the § 624.155(4) 90-day safe harbor now requires "sufficient evidence to support the amount of the claim" to start the clock, loading the demand with complete documentation is both strategically and legally important.
State the policy and limits clearly. Identify the UM/UIM policy, the specific vehicle on which coverage is sought, and the limits demanded.
Document exhaustion of tortfeasor coverage. In underinsured motorist cases, the insured must typically exhaust the tortfeasor's liability limits or obtain the insurer's consent to settle before making a UIM claim. Document this exhaustion and any consent-to-settle correspondence.
Set a reasonable deadline. Post-HB 837, demands should avoid artificial short deadlines. A 30- to 45-day deadline is defensible if the documentation package is complete and the claim is mature.
Bad Faith in the UM/UIM Context: Specific Conduct Issues
Carriers in UM/UIM cases engage in the same bad faith patterns as in third-party liability cases, but the first-party posture creates additional pressure points:
Disputing the tortfeasor's negligence after the underlying claim has been resolved. A carrier that disputes liability for the UM/UIM claim by relitigating the tortfeasor's negligence after liability was established in the underlying tort case may be engaging in bad faith conduct. The insured's resolution of the underlying tort claim or the tortfeasor's admitted liability provides a strong foundation for the bad faith action.
Demanding surveillance or IME without basis. Ordering repetitive independent medical examinations or conducting surveillance of the insured without credible factual basis for disputing the treating physician's findings raises bad faith concerns.
Low-ball offers without investigation. An offer that does not reflect the documented damages and is made without any meaningful investigation of the medical evidence implicates both Berges (totality of circumstances) and the § 624.155 failure-to-settle standard.
Conclusion
Florida's UM/UIM bad faith framework rewards methodical pre-suit practice. The sequence — complete UM/UIM demand → resolution of underlying benefits claim → filing of CRN → expiration of 60-day cure period → filing of bad faith action — must be executed without procedural shortfalls. The Ruiz discovery architecture gives plaintiffs powerful tools once the bad faith action is filed. Counsel who build the record from the first demand letter forward are best positioned to capitalize on a carrier's failure to honor its obligations to its own insured.
Talk to Yates Anderson
If you are litigating a matter in this area — or weighing whether to — the working analysis above only goes so far. Request a case evaluation and a Yates Anderson attorney will respond within one business day.
Informational only. Not legal advice. No attorney-client relationship is created by reading this post. Consult a licensed attorney in your jurisdiction.