On January 23, 2014, Florida’s First District Court of Appeal overturned a trial court order that found Citizens Property Insurance Corporation was immune from bad faith liability. The First District held that the statute subjecting insurers to bad faith liability for railing to act in good faith, also applies to Citizens.1

This decision is important for Florida’s policyholders. Citizens is Florida’s largest property insurance provider. Without potential bad faith exposure, many policyholders feel they have no recourse when Citizens wrongly denies or underpays their claim.

The basis of the decision is critical. All too often, Citizens’ top executives hide behind the legislature to defend their actions. The 1st District decision is based on Florida Statute 627.351(6)(s)2, which codifies Citizens’ obligation to treat Florida’s policyholders’ claims “carefully, timely, diligently, and in good faith.” This statute was drafted and passed by Florida’s legislature to protect policyholders.

Despite the clear and unambiguous language of this statute, Citizens consistently takes the position that it is immune from any potential bad faith liability because it is a quasi-governmental entity. They argue that if Citizens is exposed to extra-contractual damages, our tax dollars will be wasted on litigation over false or inflated claims. This is a fallacy.

If Citizens adjusts claims in good faith and treats Florida’s policyholders fairly, then everyone wins. Claimants receive the benefits owed and taxpayers will avoid unnecessary litigation fees and costs.

I hope this decision inspires Citizens to make drastic changes in its adjustment practices.

If Citizens failed to treat you or your client fairly, please consult an attorney that specializes in representing first-party claimants to help you hold Citizens accountable.


1 Perdido Sun Condominium Assoc., Inc. v. Citizens Property Ins. Corp., No.1D13-1951, 39 Fla. L. Weekly D213a (Fla. 1st DCA Jan. 23, 2014).