Bad Faith Against Citizens is Limited to Sovereign Immunity Caps
Citizens Property Insurance Corporation, a product of Florida Statutes, is now shielded by sovereign immunity (cannot bring claims against the government unless authorized). Citizens Property Ins. Co. v. Garfinkel (Fla. 5th DCA 2009). This means that any first or third party common bad faith claim for failure to settle when the insurance company could have and should have settled is limited to the sovereign immunity caps. Further, first party bad faith under section 627.155 or 627.351 by means of a civil remedy notice of insurer violation is not allowed. The real meaning of this decision is that 1) if you are an injured third party, then Citizens does not have to negotiate in good faith with you because they know that the biggest hit that they are ever going to take is $100,000 past policy limits and 2) if you are a property owner, then Citizens does not have to negotiate in good faith to protect you from an excess judgment and you (not Citizens) would be on the hook to pay any judgment in excess of your liability limits. Putting reasoning into the equation, one must ask whether Citizens will still settle claims when Citizens is insulated from liability as an insurance company. In other words, if there are no consequences to not paying claims, then why would they pay claims.