FedNat Insurance Company, fka Federated Insurance Company, was the recent topic of conversation that I had with an attorney seeking information about FedNat claims practices and how to prosecute a bad faith lawsuit in Florida. One suggestion I made was to study the proposed jury instructions in the upcoming Sebo bad faith case.1
Insurance companies have good faith duties to their customers. A jury will determine the accountability for that. So, what will the jury be asked to consider from the proof and evidence of the insurance company’s conduct? Read the jury instructions. For most policyholders bringing a “bad faith” lawsuit, they have already had a voluntary payment, an appraisal award, or a judgment from the underlying contract dispute. So, a jury instruction about what happened should be stated. In the Sebo case, the proposed jury instruction is:
Prior to this bad faith action, a jury rendered a verdict in favor of Mr. Sebo and against American Home Assurance Company, later to reduced to a judgment in the amount of $8,070,000.00. This Court found that American Home Assurance Company sold Mr. Sebo an all-risk insurance policy, the policy included coverage for loss independently caused by covered wind and rain events and construction defects, and that American Home Assurance Company had breached the insurance policy by failing to pay Mr. Sebo’s claim. That result was affirmed on appeal to the Florida Supreme Court. An Amended Final Judgement was entered in Mr. Sebo’s favor after the appeal concluded.
I told the attorney questioning FedNat, that the higher the amount of the recovery that FedNat failed to pay, the better the case is because FedNat claims managers would have to explain why they there were wrong. In Sebo, the insurance company was over $8 million wrong. I also told the attorney questioning me that FedNat would have to turn over work product documents and all underlying claims file materials. This is because an insurer has an ongoing obligation to act in good faith—even during litigation. The proposed Sebo jury instruction noted:
An insurance company has a continuing duty to adjust a claim and evaluate coverage in good faith, even after litigation is brought by or against the insurer by the insured. That duty of good faith continues through the conclusion of the litigation until the claim is paid or a final judgment is entered.
For all those with a FedNat claim where payment has been delayed, underpaid, or wrongly denied coverage, I want to help you remedy that problem. Please call me on my cell at (813) 695-8733. I am certain there are many Hurricane Irma, Michael, and Sally claimants who have been wronged by FedNat’s conduct. Please reach out and contact me so we can help provide you with information and direction that can help.
Thought For The Day
At FedNat, we’re committed to providing you with fair, fast, personalized claims handling…. our team of experienced, compassionate professionals will begin navigating your road to recovery. You can trust us to be the calm through whatever storm you’re going through.
—FedNat Website Promise as of February 2022
1 Sebo v. American Home Assurance Co., No 07-0054-CA [Proposed Jury Instruction] (Fla. 13th Cir.).