The Florida Legislature passed a law in 1982 that provides for a Policyholder Remedy when an insurer fails to act in good faith and causes damage to the policyholder. As a result, insurers could be held accountable to their policyholders under a "good faith" duty and standard of conduct similar to the "good faith" duties other states recognized through judicial common law. The legislation was necessary because conservative Florida judges refused to accept a common law "good faith" standard and the legislature had to step in and do something about the problem of insurer wrongdoing. See Allstate Indemnity Co. v. Ruiz, 899 So. 2d 1121 (Fla. 2005). Why should the largest property insurance company in Florida not have to comply with this law or be held accountable for the damages it causes?
I can think of no valid reason, but this is the sad and current situation. Citizens Property Insurance Corporation can thumb its nose at its customers without penalty, claiming immunity from consumer protection laws to which every other insurer in this state must comply. Why should Citizens have this advantage over every private insurance company in this state? It does not take a rocket scientist to figure out that an insurer that takes premiums from its customers and then delays or denies full benefits at the time of the claim can make a lot more money than by being honest and treating customers in good faith.
The effect of the Florida Insurance Civil Remedy Statute is to level the playing field by making it more expensive for cheating insurers to gain an economic advantage over those that play fairly and by the rules. Cheating insurers should not prosper. Why should Citizens executives be afraid of paying damages to its customers under the law if it is treating its customers honestly and acting in good faith? Good and honest insurers do not worry about consumer protection statutes. They welcome them because they have little to worry about. Only insurance companies that fail to treat policyholders honestly and in good faith ever complain about these laws because they end up paying as a result of their actions.
Indeed, under the current law in Florida, the insurer must get a notice and then 60 days to correct the claims problem before it ever has to pay a policyholder for damages. There really is no reason that Citizens should have a free pass. It should not have such an advantage and should have to pay for damages it causes to its customers by wrongful conduct.
