Jason Goldman, Aaron Davis: Florida’s bad faith reform went too far — it’s time to fix it

When Floridians pay their insurance premiums, whether for auto coverage, business protection, or professional liability, they’re not just buying peace of mind. They’re purchasing a promise that their insurer will step in when something goes wrong and handle their claim fairly and in good faith.

But that promise is unraveling. Thanks to sweeping statutory reforms passed by the Florida Legislature, insurance companies are no longer held to the same standards of accountability. While the changes were sold as a solution to rising premiums and excessive litigation, they’ve gone too far, making it harder, not easier, for everyday Floridians and business owners to get the coverage they’ve paid for. It’s time for lawmakers to fix what they broke.

Bad faith is on the rise — but accountability is on the decline

The recent reforms didn’t eliminate bad faith conduct. They just made it harder to bring legitimate bad-faith cases to light. Insurance companies now have multiple built-in opportunities to “correct” their missteps before a lawsuit can be filed. That might sound reasonable on paper, but in practice, it gives insurers cover to delay, deny, and deflect without facing consequences.

This has shifted the burden onto plaintiffs’ lawyers, particularly in personal injury and wrongful death cases. Today, lawyers must act as stand-in insurance adjusters, completing their own due diligence from the insurer’s perspective and delivering meticulously packaged demands on a silver platter within rigid timelines. Even when they do, insurers often claim they’re still missing key information, buying themselves more time while victims wait.

We recently represented a family in a tragic wrongful death case. We provided clear documentation of liability, outlined damages, and submitted a comprehensive demand. Under the law, the insurance company had 90 days to respond in good faith. But instead of honoring that deadline, they claimed they were still waiting for exposure clarification, despite having all the necessary information. This kind of delay, now legally insulated, shows how reforms have failed the very people they were meant to protect.

Commercial policyholders are being left behind

The misconception that bad faith reform only affects personal injury cases misses a much broader issue: Bad faith conduct is rampant in commercial insurance. We’re seeing it regularly in cases involving Directors and Officers (D&O) liability, general liability, cyber coverage, and Errors and Omissions (E&O) policies.

These are not small claims or unsophisticated policyholders. They’re businesses and professionals who rely on their policies to protect against serious financial exposure. But increasingly, insurance carriers are either denying coverage outright or refusing to tender the full amount owed, even when liability is obvious and the policy should apply. And because of the new reforms, the tools that once helped level the playing field for policyholders are largely unavailable or ineffective.

The pendulum has swung too far. What was intended as tort reform has turned into a liability shield for insurers, undermining the entire premise of good faith coverage.

Premiums keep rising, and insurers keep leaving

If the goal of these legislative changes was to reduce premiums or stabilize the market, it hasn’t worked. Florida consumers and businesses are still seeing premiums climb, and insurance carriers are still pulling out of the state. The only thing that’s changed is that policyholders now have fewer legal remedies when things go wrong.

To make matters worse, lawmakers took a broad approach to addressing property insurance litigation. They swept in unrelated claims, from personal injury to commercial liability to medical billing. Limiting a provider’s ability to sue for unpaid services doesn’t help the property market; it just hurts doctors and patients. This kind of legislative overreach reveals a troubling lack of nuance.

What policyholders need to know

Until the law is corrected, policyholders, particularly business owners and professionals, must be proactive in protecting themselves. That begins with honesty at every stage of the insurance process. From the initial application to the moment a claim is filed, any inconsistency or omission can be used by an insurer as justification for denial. Full disclosure is essential. Providing detailed and complete information up front gives insurers less room to delay or deflect by claiming they lacked sufficient details to evaluate the claim.

Policyholders should also maintain clear, professional communication throughout the process. Every interaction with the insurance company, whether by phone, email, or written correspondence, should be documented and preserved. These records may be critical if a dispute arises down the line. And finally, legal counsel should be engaged early. Waiting until a claim is denied can limit your options; having an attorney involved from the start ensures you’re responding appropriately to requests, complying with policy terms, and preserving your rights. In an environment where the law is no longer on your side, the best defense is preparation, professionalism, and persistence.

Time for a course correction

Florida’s bad faith reform hasn’t lived up to its promise. In fact, it’s failed spectacularly, emboldening insurance companies, harming consumers, and doing little to bring real stability to the market. The law now protects the powerful at the expense of the people it was meant to serve.

This is not a partisan issue. It’s a consumer protection issue. But in a one-party state like Florida, it’s difficult to advance meaningful change when the political and financial interests align so heavily on one side. And in that kind of environment, it’s easy for ordinary Floridians and their businesses to get lost in the shuffle.

Insurance may not be a headline-grabber. But when your claim is denied, your business is at risk, or your family is left without recourse after a tragedy, the stakes couldn’t be higher.

It’s time to restore balance to Florida’s insurance system. The Legislature must revisit the bad faith reforms, restore accountability, and remember why insurance laws exist: to protect the people who pay the premiums.

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Jason Goldman and Aaron Davis are co-founders of Davis Goldman PLLC.