The phrase unfair trade practices can be defined as any business practice or act that is deceptive, fraudulent, or causes injury to a consumer. These practices can include acts that are deemed unlawful, such as those that violate a consumer protection law. Some examples of unfair trade methods are: the false representation of a good or service; false free gift or prize offers; non-compliance with manufacturing standards; false advertising; or deceptive pricing. Show
unfair advertisingA simple definition of unfair advertising is false advertising that misrepresents a product, service, or price. A broader description of the term will include unfair sales strategies, such as “bait and switch,” a practice of advertising one item at a low price with the intent of actually selling other items. Unfair ads can be categorized as those with incorrect pricing, fake endorsements, false statements, or exaggerated performance descriptions. Deceptive guarantees are also considered a form of unfair advertising. Florida lists unfair claims settlement practices in its “Unfair Insurance Trade Practices Act.” Fla. Stat. § 626.9541(i). Additional prohibited claims practices are described in Fla. Stat. § 624.155(1)(b), which also creates a private cause of action by an insured for violation of these statutes, as discussed within. Florida statutes prohibit the following unfair claims settlement practices (Fla. Stat. § 626.9541(1)(i); Fla. Stat. § 624.155(1)):
Private Cause of Action for Single Instance of Prohibited Act A private cause of action may be brought on the basis of an allegation of a single prohibited act listed above, even for those acts which are stated to require “with such frequency as to indicate a general business practice.” Fla. Stat. § 624.155(1); Dadeland Depot, Inc. v. St. Paul Fire and Marine Ins. Co., 945 So.2d 1216, 1232-1233 (Fla. 2006); Hogan v. Provident Life & Accident Ins. Co., 665 F.Supp.2d 1273, 1283 (M.D. Fla. 2009). An insured must file with the insurer and the Florida Department of Financial Services a notice of alleged violation of claims practices at least 60 days prior to filing suit. The purpose is to provide the insurer with opportunity to cure the alleged violation. Fla. Stat. § 624.155(3)(a). The existence of contractual liability and the determination of the extent of contractual damages are necessary elements of an action for bad faith under Fla. Stat. § 624.155(1)(b)(1). Fridman v. Safeco Ins. Co., 185 So. 3d 1214, 1215 (Fla. 2016). Thus, an insurer cannot be liable for first-party bad faith under § 624.155(1)(b)(1) where no coverage exists. Independent Adjusters Independent insurance adjusters in Florida are also governed by a regulatory Code of Ethics. 69B-220.201, F.A.C. Additional requirements apply to public adjusters. Fla. Stat. § 626.854; 69B-220.051 & 69B-220(4), F.A.C. Insureds have argued that an independent adjuster’s failure to comply is attributable to the insurer. Communication, Investigation and Payment Deadlines Insurers handling certain types of claims (primarily residential property, including commercial residential up to 10,000 square feet, as well as certain contents claims) are subject to a statutory mandate to communicate, investigate, and pay or deny claims within time deadlines. Check Fla. Stat. §627.70131 (5)(c) to confirm if your claim is included in these requirements. Communications must be responded to within 14 days, unless factors beyond the control of the insurer prevent it. An acknowledgement of a notice of claim must include claim forms, unless the acknowledgement reasonably advises the claim appears not to be covered, or unless factors beyond the control of the insurer prevent it. Investigation must begin within 10 days after submission of proofs of loss, unless factors beyond the control of the insurer prevent it. Payment or denial of claims must be made within 90 days, unless factors beyond the control of the insurer prevent it, in which case the claim must be paid or denied within 15 days after those factors cease. Failure to timely pay entitles the insured to interest, and is a breach of proper claims handling requirements – but the statute provides that slow pay, standing alone, shall not be a basis for a legal action against an insurer. In a separate regulation that overlaps the statute above, Florida also provides that “every” property and casualty insurer must adopt standards for the acknowledgment of communications and investigation of claims that includes responding to communications within 14 days and beginning an investigation in 10 working days after receipt of proof of loss unless “factors beyond the control of the insurer” prevent it. Limited Mediation Program for Residential (including commercial residential) Claims In claims for damage to residential property, both commercial and homeowner insureds and their insurers can request a mediated claims settlement conference before commencing the appraisal process or litigation, or during litigation. The policyholder determines whether legal counsel may be involved. The insurer must include in its response to any eligible claim notice of the insured’s right to this procedure and related information mandated by the Department of Insurance, which will administer the property insurance mediation program. Fla. Stat. § 627.7015. This program does not apply to disputes over coverage, where the insurer suspects fraud or denies due to a misrepresentation, to claims for less than $500, and to a windstorm or hurricane claim that does not comply with Fla. Stat. § 627.70132, which requires submission of such claims within 3 years after the hurricane first made landfall or the windstorm caused the covered damage. The regulations detailing this program are found at 69J-166.002, F.A.C., Mediation of Commercial Residential Property Insurance Claims, and 69J-166.031, F.A.C., Mediation of Residential Property Insurance Claims. Windstorm Deductibles Florida courts will enforce plainly written deductibles for “windstorm” or other perils. See, e.g., El-Ad Enclave at Miramar Condo. Ass’n v. Mt. Hawley Ins. Co., 752 F.Supp.2d 1282 (S.D. Fla. 2010) (per building deductible for windstorm applied). Hurricane Claims Standards The Florida Office of Insurance Regulation has not issued directives or bulletins concerning claims handling or the application of deductibles specific to Hurricane Dorian. The Office publishes links for hurricane-specific information, including disaster preparedness, on its website: https://www.floir.com/Office/HurricaneSeason/hurricaneresourcepage.aspx Which of the following is example of an unfair trade practice?Some examples of unfair trade methods are: the false representation of a good or service; false free gift or prize offers; non-compliance with manufacturing standards; false advertising; or deceptive pricing.
Which of the following defines unfair discrimination as it relates to insurance sales in Florida?Which of the following defines "unfair discrimination" as it relates to insurance sales in Florida? It is an unfair trade practice to discriminate against individuals of the same class and equal expectation of life in the rates, terms, conditions, benefits, or any policy provision for insurance.
Which of the following is an example of an unfair claims settlement practice?Examples of Unfair Claims Practices
Misrepresenting insurance policy provisions. Failing to adopt and implement reasonable standards for the prompt investigation of claims. Failing to act reasonably when an insured presents a claim. Refusing to pay claims without conducting a reasonable investigation.
Which of the following is not considered a misrepresentation as it pertains to unfair trade practice?Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practies? Making comparisons between different policies.
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