Eden Owners Association, Inc. sued General Security Indemnity Company of Arizona, HDI Global Specialty SE, StarStone Specialty Insurance Company, and QBE Specialty Insurance Company in the Northern District of Florida, invoking diversity jurisdiction and venue based on insured property in Pensacola and events in the district. Eden alleges its condominium property at 16281 Perdido Key Drive suffered extensive damage from Hurricane Sally on September 16, 2020, and that the insurers’ layered policies provided up to roughly $50 million in building coverage for the December 1, 2019–December 1, 2020 period. After initial inspections and a first engineering report acknowledging broad storm damage, the insurers paid advances and partial amounts totaling about $7.6 million but later shifted positions on causation and exclusions, issued limited supplements, and ultimately denied portions of the claim despite an Eden-aligned scope and contractor estimate around $21.6 million. Eden details prolonged adjustment delays, non-responsiveness, rejection of proofs of loss, and failure to engage in good-faith settlement, leading it to invoke appraisal; the court appointed an umpire, and on January 27, 2025, the appraisal award set the loss at approximately $21.0 million RCV, after which insurers paid the award (less depreciation holdback). Eden now seeks extra-contractual relief, alleging unfair claim settlement practices and statutory bad faith under Fla. Stat. §§ 624.155(1)(b)1 and 626.9541 based on misrepresentations, failure to adopt proper standards, delayed/insufficient communications, inadequate explanations, failure to respond to proofs of loss, and failure to pay undisputed amounts, and demands damages, interest, attorneys’ fees, costs, and a jury trial, while reserving the right to seek punitive damages.    

An insurer’s unreasonable handling and/or denial of a claim can give rise to a cause of action for bad faith. It is always important to consider whether the particular facts of a claim give rise to bad faith under the applicable state law.