As the name suggests, punitive damages are assessed against defendants in civil cases to punish past misconduct and to deter future wrongdoing that is grossly negligent or intentional. If punitive damages are ordered by a court or resolved during settlement negotiations, they are punishing the defendant, who must pay the amount of money designated and give it to the plaintiff. If a judge or jury awards punitive damages, they are sending a message to the insurance company to not act this way to any other policyholder again.
When an insurance company agrees to insure a person’s home by way of monetary premiums, the insurer and insured enter into a legally binding contract. The insurance company sets forth rules in their contract, but is expected to cover valid property damage claims according to the insurance policy. In the case of a homeowner insurance policy, it is important you as a paying customer can trust that your insurer will provide the coverage you deserve if the worst-case scenario comes to pass, such as flood, wind, fire, storm, mold, or sinkhole damage. Unfortunately, insurance companies think they can collect premiums from insureds and not pay covered claims when there’s a loss.
When an insurance company intentionally denies or does not cover a residential insurance claim that should be paid, the insurer may have breached the contract by not acting in good faith and fair dealings. Under Section 624.155, Florida Statutes, when insurance companies fail to uphold their duties to insureds, those customers have a right to file a claim based on breach of contract. When this happens, the insured may pursue punitive damages under tort law, claiming that the insurer’s conduct was deliberate. Punitive damages may be significantly more than out-of-pocket expenses or the principal as they are paid in excess of the insurance claim.
We are frequently retained by other lawyers to pursue punitive damage cases since they do not possess the breadth, depth, experience, and resources that we have to face off against Big Insurance. In representing policyholders involved in complex property damage claims, we prioritize collaboration and are retained by other law firms that seek expertise in cases that compel punitive damages. It takes time, a plan, and the gumption to push and plan until you prevail.
The meat and potatoes of a punitive damage award is about demonstrating a general business practice to leverage a class of insureds, and not just one family. In an active case, our firm’s investigation revealed the insurer’s malicious conduct surrounding a sinkhole damage claim had occurred more than 50 other times, making the case the insurer’s conduct was more than just a single act by a rogue claims adjuster.
We regularly obtain permission by the Court, as is required by law, to allow us to ask a jury to “punish” the insurer by making them pay a large amount out of its own pocket in punitive damages. The purpose is to deter the insurer’s future conduct, with the awareness that the insurer will have to answer for its choices.