Fighting for Policyholder Rights: Florida Bad Faith Law

When a hurricane damages your home, you expect your insurance company to play fair. But what happens when insurers undervalue claims, drag out disputes, and then hide behind new laws to avoid accountability? That’s precisely what happened in Cindy Vo v. Scottsdale Insurance Company—a case that delivered a crucial victory for policyholders in Florida.

A Classic Case of Undervaluation

In 2020, Vo, a homeowner, filed a hurricane damage claim with Scottsdale Insurance Company. Scottsdale’s response? A shockingly low estimate of $420.64—an amount so small it didn’t even exceed the wind deductible. Scottsdale paid nothing.

Vo hired a public adjuster, who estimated the damage at $38,584. Scottsdale wasn’t budging. The insurer brought in another adjuster, who conveniently agreed with Scottsdale’s original, drastically low valuation.

Frustrated, Vo filed a Civil Remedy Notice (CRN), alleging bad faith and statutory violations. After a long battle, an appraisal awarded her $34,545.66—proving Scottsdale had grossly underpaid. The insurer finally paid up, and the breach of contract case was settled in 2021.

Does Florida’s New Law Bad Faith Law Block Unfair Claims Practice Lawsuits?

In 2022, Florida’s legislature passed section 624.1551, creating new barriers for policyholders to sue insurers for bad faith. Under this law:

Policyholders couldn’t file a bad faith lawsuit unless a court had ruled the insurer breached the contract.
Appraisal awards didn’t count as proof of breach.
The law applied to extracontractual damages claims under section 624.155.

This stacked the deck against policyholders, giving insurers a powerful escape route to avoid accountability.

When Vo filed her bad faith lawsuit in 2023, Scottsdale used the new law as a shield, arguing she couldn’t sue because her claim had settled through appraisal—not a court ruling.

The trial court agreed with Scottsdale and dismissed her case, ruling that her bad faith claim was invalid without a formal court determination of contract breach. This view is the “get out of jail free card” rationale, which many wrongful-acting carriers use, as noted in Bad Faith Insurance Practices Shielded By “Get Out of Jail Free” Late Payments. Chip Merlin stated the obvious irony of such a rule:

Imagine a world where breaking the rules carries no real consequences. That’s the reality policyholders face when insurance companies delay or wrongfully deny claims, only to make a late payment after an appraisal and walk away without any real accountability….

…if you eventually pay what you owe—no matter how long you drag it out—you can avoid any real consequences for wrongful claim practices. The result is an uneven playing field where policyholders suffer through financial uncertainty, property deterioration, and legal battles while insurance companies use delay tactics as a calculated business strategy.

The logic behind shielding insurers from bad faith liability after a late payment is deeply flawed. When a policyholder files a legitimate claim, they do so because they need the money to repair their home, replace their belongings, or recover from a loss right away. A wrongful denial or prolonged delay doesn’t just create inconvenience—it can force business owners and families into financial distress, leave structures in disrepair, and disrupt lives. It undermines the reason why Americans purchase insurance in the first place. The fact that an insurer can later ‘fix’ the situation with a payment—including interest—doesn’t erase the harm caused by the initial refusal to pay or roadblocks causing delay.

Fortunately, Vo didn’t give up. She appealed, arguing that the new law couldn’t apply retroactively to her case since her bad faith claim had vested before the statute was enacted.

The First District Court of Appeal agreed, 1 holding that:

New laws cannot retroactively eliminate a valid cause of action.
Section 624.1551 imposed new legal burdens on policyholders, meaning it could only apply prospectively.
Vo’s right to sue for bad faith had already vested in 2021—before the law existed.

What This Means for Florida Policyholders

This ruling protects policyholders and sends a strong message. Insurers can’t rewrite history. If bad faith occurred before a new law, policyholders still have the right to sue. Appraisal isn’t a loophole for insurers. Just because a claim settles through appraisal doesn’t mean insurers acted in good faith. Holding insurers accountable is still possible. Despite legislative efforts to weaken consumer protections, courts aren’t letting insurers off the hook.

Policyholders Must Fight Back

For years, insurers have pushed for laws that make it harder for homeowners to challenge bad claim handling. Cindy Vo’s case proves that policyholders can fight back—and win.

If you’re dealing with a lowball claim offer or unfair denial:

Document everything – Keep records of estimates, inspections, and insurer communications.
Seek expert help – Public adjusters and attorneys can level the playing field.
Don’t accept the first offer – Challenge any suspiciously low damage estimates.
Know your rights – The law is evolving, and courts still protect policyholders.

This Florida bad faith law decision is a step in the right direction, ensuring that insurers can’t use new laws to erase past misconduct. This is a warning to insurers that bad faith conduct won’t go unchallenged.

Thought For The Day

“You cannot oppress the people who are not afraid anymore.”

—Cesar Chavez

1 Vo v. Scottsdale Ins. Co., No. 1D2023-2228 (Fla. 1st DCA Feb. 26, 2025).