In previous blog posts an insurers’ duty of good faith was addressed, specifically Florida case law’s analysis on bad faith claims and the implications for when an insurer should have settled a claim. This analysis (the insurance company’s duty to “settle a claim”) also carries over when there are multiple claims arising out of one accident.
Florida bad faith case law establishes that the insurance companies decision to settle certain claims to the exclusion of others be “reasonable and in keeping with its good faith duty.” Farinas v. Florida Farm Bureau Gen Ins. Co., 850 So.2d 555 (Fla. 4th DCA 2003). The Farinas decision imposes requirements on the insurance company when they are faced with multiple claimants. Id. These requirements include the following:
- Fully investigate all claims arising from a multiple claim accident
- Seek to settle as many claims as possible within the policy limit
- Minimize the magnitude of possible excess judgments against the insured by reasoned claim settlement; and
- Keep the insured informed of the claim resolution process.
If the insurance company fails to follow the above requirements they may be exposed to a potential bad faith law suit. Thus when involved in a claim with multiple claimants it is important for the Tampa personal injury attorney to address not only the existence of the other claims but to understand and address the insurance company’s discretion in determining how and why they are settling particular claims.