MIAMI—A Florida condominium association is suing QBE Insurance Corp. and its Florida general managing agent for more than $500 million in damages, alleging bad faith and deception in handling hurricane claims.

The suit was filed Monday in Miami-Dade County Circuit Court by Miami-based Buckley Towers Condominium. The association accuses the New York-based subsidiary of Australian insurer QBE and its managing general agent—Brown and Brown Inc. subsidiary Florida Intracoastal Underwriters Ltd. Co.—of engaging in deceptive and fraudulent bad-faith claims handling in connection with claims arising from Hurricane Wilma in 2005.

Among other things, the suit alleges the QBE used an adjuster whose license had been revoked, insisted that storm damage was due to regular wear and tear and falsely accused Buckley Towers of misconduct in an effort to deny the claims.

According to a statement issued by Palm Beach, Fla.-based law firm Katzman Garfinkel Rosenbaum L.L.P., the Miami-Dade County Unsafe Structures Board has ordered two 17-story structures demolished in 2010 unless they can be repaired, “which cannot be done without the insurance money awarded to Buckley Towers.” The statement said Buckley Towers obtained a judgment of about $25 million plus lawyers’ fees earlier this year in federal court.

“QBE, as a business decision, decided to let the buildings be condemned and physically torn down, and the residents forced out of their homes,” according to the lawsuit. “These condemnation proceedings would have been avoided had QBE fairly and honestly adjusted the claim.”

The lawsuit states that, in June, QBE agreed to pay a $150,000 fine after Florida insurance regulators accused it of violating state insurance regulations and administrative codes, and entered into a consent decree concerning numerous violations. In a statement, Buckley Towers’ attorney—Daniel S. Rosenbaum, a founding partner for Katzman Garfinkel Rosenbaum—said he believes “the facts are so compelling that they will demonstrate that a jury verdict exceeding” $500 million is “warranted” against the parties who engaged in the alleged misconduct.

QBE and Brown & Brown were not immediately available for comment.