Florida Statute § 627.4265 requires an insurer to pay an agreed settlement within 20 days of the written settlement agreement, and any unpaid amount after that deadline accrues interest at 12 percent per year from the date the settlement was reached.1Florida Senate. Florida Statutes 627.4265 – Payment of Settlement The statute applies once you and the insurer have reduced a claim to a written settlement; it does not govern lawsuits, bad faith, or the right to sue an insurer in the first place.
The 20-Day Payment Deadline
Section 627.4265 covers one specific moment in the claim process: you and an insurer have already agreed in writing to resolve a claim, and you are waiting for payment. From the date of that written agreement, the insurer has 20 days to pay. The rule applies across insurance types. Auto, homeowner, commercial, and other claims all fall under the same deadline once a written settlement exists.1Florida Senate. Florida Statutes 627.4265 – Payment of Settlement
The parties can set their own payment date in the settlement itself. If the written agreement specifies a different date, that date controls. The 20-day period is the default when the agreement is silent on timing.
When Signing a Release Delays the Clock
Insurers commonly condition payment on receiving a signed release from the claimant. When they do, the 20-day clock does not start on the date of the settlement agreement. It starts when you deliver the signed release back to the insurer.1Florida Senate. Florida Statutes 627.4265 – Payment of Settlement
That shift matters in practice. Delay on your side in returning the release delays the deadline the insurer has to meet, and it delays the point at which the interest penalty would begin to run. If prompt payment matters to you, get the signed release to the insurer quickly and keep proof of the delivery date.
The 12 Percent Interest Penalty
If the insurer misses the 20-day deadline, or any other payment date written into the settlement agreement, the unpaid amount accrues simple interest at 12 percent per year. Interest runs from the date the settlement was reached, not from the day the deadline was missed.1Florida Senate. Florida Statutes 627.4265 – Payment of Settlement
The 12 percent rate sits well above typical prejudgment interest rates in Florida, and the legislature set it that high on purpose. It gives insurers a real financial reason to issue the check on time, and it gives claimants a defined remedy when they do not.
Enforcing the Payment and Interest
If the insurer has not paid within the applicable window, your remedy under § 627.4265 is to collect the settlement amount plus the statutory interest. A written demand that references the settlement date, the amount owed, and the statute often prompts payment without further action. If it does not, the settlement agreement itself is a contract, and a breach of contract action to enforce it carries a five-year limitations period for written contracts.2The Florida Legislature. Florida Statutes 95.11 – Limitations Other Than for the Recovery of Real Property
Keep documentation of three dates: when the written settlement was reached, when you delivered any required release, and when payment arrived (or the current date, if it still has not). Those are the dates that determine how much interest has accrued.
What Section 627.4265 Does Not Cover
Many people land on § 627.4265 looking for rules it does not contain. The statute is often confused with the broader body of Florida law about when and how an insurer can be sued. If that is what you need, the statute is pointing you to the wrong place.
The statute does not govern when you can sue a liability insurer directly. That question is controlled by § 627.4136, the non-joinder rule, which prevents a liability insurer from being named as a defendant in your initial lawsuit against the person who harmed you. You must first obtain a settlement or verdict against the insured for a covered claim before the insurer can be joined.3Justia Law. Florida Statutes 627.4136 – Nonjoinder of Insurers
The statute also does not govern bad faith. Claims that an insurer unreasonably delayed, refused to settle within policy limits, or mishandled a claim fall under § 624.155, which has its own procedure, including a mandatory Civil Remedy Notice and a 60-day cure period before suit can be filed.4The Florida Legislature. Florida Statutes 624.155 – Civil Remedy Florida’s 2023 tort reform legislation (HB 837) made significant changes to that framework, including a 90-day safe harbor for insurers who pay the policy limits or the amount demanded within 90 days of receiving the claim with supporting evidence.5Florida Senate. CS/CS/HB 837 Civil Remedies Analysis
And the statute does not apply when there is no written settlement. If an insurer has denied your claim, is still investigating it, or has made an offer you have not accepted, § 627.4265 has no role. The 20-day clock exists only after a written settlement agreement is in place.
Points to Confirm Before Relying on the Statute
Three questions determine whether § 627.4265 actually gives you a remedy in a given situation:
- Is there a written settlement agreement, signed by both sides? Oral agreements and informal correspondence may not qualify.
- Does the agreement specify its own payment date? If so, that date controls instead of the 20-day default.
- Does the agreement condition payment on your signed release? If so, the deadline runs from your delivery of the release, not from the agreement itself.
Once those facts are settled, the statute is straightforward: pay within the window, or pay the amount with 12 percent annual interest from the date the deal was struck.