Insurance Company Bad Faith in Georgia
People buy insurance in order to obtain financial and legal protection in the event of an adverse event, and insurers owe their insured a duty of good faith and fair dealing. Unfortunately, insurance companies often create a work atmosphere that encourages denial of claims in order to increase the insurance company’s profitability. If you are a claimant or insured person who is not being provided a defense or indemnity that is owed under your Georgia policy, you may have the right to file a lawsuit against the insurer for bad faith. Our experienced Atlanta insurance bad faith lawyers can help you fight for the protection to which you are entitled. We serve insured people and claimants in Jonesboro, Decatur, and surrounding areas.
What Counts as Bad Faith?
In every insurance contract in Georgia there is an implied obligation to act in good faith. An insurer that delays, withholds or denies benefits that are owed to the insured in response to legitimate claims that the insurer filed in accord with the policy is acting in bad faith.
The type of insurance contract at issue may impact which bad faith statute applies to an insurer’s conduct. First party insurance, including automobile coverage, involves paying an insured directly for his or her losses. In Georgia, failure to pay a first party insurance claim is covered by O.C.G.A. § 33-4-6. In first person insurance cases, an insurance company that acts in bad faith is liable for the loss as well as whichever is more: $5000 or 50% of the liability. In cases covered by this statute, bad faith is a refusal to pay a claim for frivolous reasons or for no reason. An insured who wishes to make a claim under this statute must alert an insurer he is asserting bad faith and give 60 days for the insurer to pay the claim.
Payment or denial of a claim within a reasonable time frame is one duty of an insurance company. If you have made a claim to your insurer, you are entitled to a prompt response and answers to your questions. This includes an explanation for the denial and a policy provision supporting the denial.
Insurers also have a duty to protect you by settling a valid claim rather than expose you to a judgment for liability that is excessive. When dealing with liability claims by third parties, insurers must give the insured’s interests the same consideration it gives its own interests. This means that if there is a demand for settlement within policy limits and an insurer has knowledge of clear liability and special damages that are greater than the policy limits, the insurer must communicate with a plaintiff’s attorney and advise the insured of an offer to settle within policy limits. An insurer that fails to follow its obligation in this regard may be held liable for a judgment in excess of policy limits, attorneys’ fees, and punitive damages.