Attorneys Fees to Insured Who Sues Successfully to Recover Benefits

On June 12, 2003 the Florida Supreme Court in Pepper's Steel & Alloys, Inc. v. United States, 850 So.2d 462 (Fla. 06/12/2003) ruled that claimants involved in disputes with insurance companies are entitled to attorney fees when they are forced to return to court to enforce a settlement. Under Florida Statute 627.428, policyholders are entitled to attorney fees when they prevail in their claims against their insurance companies for coverage.

 

Every insured who sues its insurer for coverage under a policy of insurance in Florida or California, and wins, may recover attorneys fees paid to get the insurance benefits even though there is no term in the contract of insurance allowing for attorneys fees.

 

This will, as the state of Florida and California desires, keep insurers from filing complaints for declaratory relief when a coverage issue arises because the expense of losing can be severe.

 

The state should be happy because suits by insurers without merit will not be filed and suits by insured against insurers without merit will be encouraged because an insured who loses need not pay the insurer's attorney fees.

 

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