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.