October 14, 2014 Articles

Guidance Coming on Determining Damages in Florida UM/UIM Bad Faith Actions

New law may be just around the corner in Florida auto insurance law

by William T. Barker

Florida has an unusual statute on damages for bad faith handling of an uninsured or underinsured motorist (UM and/or UIM) claim, and it has raised questions as to how those damages are to be determined.  Federal district courts have disagreed on this, and a now pending appeal should produce guidance, possibly from the Florida Supreme Court.


Liability on a UM/UIM claim (under Florida law, UM includes both) is determined in an action regarding the liability of the uninsured or underinsured tortfeasor, to which the insurer is joined as a party.  If the liability verdict exceeds the total available insurance, the judgment against the UM/UIM insurer is only for its applicable limit, not for the higher amount needed to fully compensate the injured insured.  Any bad faith claim regarding handling of the UM/UIM claim must be separately litigated after the underlying personal injury claim has been finally resolved.  Blanchard v. State Farm Mut. Auto. Ins. Co.,575 So. 2d 1289, 1291 (Fla. 1991).

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