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Bad Faith

Bad Faith

When an insurer fails to pay a policyholder’s valid insurance claim or defend the insured against lawsuits from third parties, the insurance company may have operated in bad faith. Georgia state law allows certain parties to seek damages against insurers acting in bad faith.

Bad faith claims often arise in relation to first-party insurance claims, but state law does provide a legal remedy for certain third-party claimants. An insurance company needs to have violated some obligation in order to constitute acting in bad faith.

Attorney for Bad Faith Insurance Claims in Atlanta, GA

If you believe that an insurer has acted in bad faith handling your recent claim following a motor vehicle wreck, it will be in your best interest to seek legal representation as soon as possible. Marcus A. Roberts & Associates represents both residents and visitors injured in automobile crashes in Clayton County, DeKalb County, Cobb County, Gwinnett County, and Fulton County.

Atlanta personal injury lawyer Marcus A. Roberts handles all kinds of insurance disputes and helps clients get the compensation they need and deserve. Call 404-577-4444 to have our attorney provide a complete evaluation of your case during a free initial consultation.


Fulton County Bad Faith Insurance Information Center


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Types of Bad Faith Insurance in Georgia

While insurance companies may have an interest in paying as little as possible to resolve claims, they are also required to handle claims in a timely and professional manner. An insurer acts in bad faith when it:

  • Refuses to settle valid claims;
  • Refuses to handle claims in a timely manner;
  • Threatens policyholders;
  • Fails to investigate claims;
  • Fails to pay benefits;
  • Fails to defend policyholders;
  • Fails to settle claims at or within policy limits;
  • Fails to protect policyholders from judgments;
  • Fails to honor valid claims for UM and UIM coverage benefits;
  • Wrongfully and unreasonably delays withholding;
  • Unreasonably interprets policy terms;
  • Pressures accident victim or gives bad advice;
  • Denies claims without reason;
  • Intentionally undervalues property;
  • Refusing to pay a covered settlement or judgment.

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Direct Actions in Atlanta Bad Faith Cases

While State law in Georgia generally does not allow people to sue the insurers of the negligent parties for acting bad faith, the State legislature did pass a law that allows for claims for property damaged by third-party claimants under motor vehicle liability policies. Georgia Code § 33-4-7 establishes that an insurer issuing a motor vehicle liability insurance policy “has an affirmative duty to adjust that loss fairly and promptly, to make a reasonable effort to investigate and evaluate the claim, and, where liability is reasonably clear, to make a good faith effort to settle with the claimant potentially entitled to recover against the insured under such policy.”

An insurer that breaches this duty can be liable to pay the claimant, in addition to the loss, not more than 50 percent of the liability of the insured for the loss or $5,000.00, whichever is greater, and all reasonable attorney’s fees for the prosecution of the action. Claimants must make specific demands on insurers and give them 60 days to pay claims, but if demands are not met within 60 days, claimants can file lawsuits against the insurers.


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Georgia Resources for Bad Faith Insurance

Georgia Code § 33-4-6 — View the full text of the State law establishing that in the event of a loss covered by an insurance policy and the insurer’s refusal to pay the same within 60 days after a demand has been made by the policyholder and a finding has been made that such refusal was in bad faith, the insurer is liable to pay such policyholder, in addition to the loss, not more than 50 percent of the liability of the insurer for the loss or $5,000.00, whichever is greater, and all reasonable attorney’s fees.

Georgia Code § 33-4-7 establishes similar penalties for insurers who breach their duties to make good faith efforts to settle with claimants potentially entitled to recover against policyholders. An insurer breaches the duty outlined in subsection (a) of this Code section when, after an investigation of the claim, liability has become reasonably clear, and the insurer in bad faith offers less than the amount reasonably owed under all the circumstances of which the insurer is aware.

Great Am. Ins. Co. v. Exum, 181 S.E.2d 704, 708 (Ga. Ct. App. 1971) — Susan Darlene Blanchard was 5 years old when Perry L. Exum negligently struck her with an automobile as she was attempting to cross Main Street in Tifton and caused her to suffer severe and permanent head and brain injuries. During Blanchard’s trial against Exum, Great American Insurance Company—defending Exum as required by the liability policy—offered to settle the case for $7,500, but Blanchard’s counsel refused and instead offered to settle for $9,000—an amount within the limits of the policy of liability insurance and Exum made a written demand upon the Great American to settle the case for. Blanchard’s suit sought damages of $100,000, but the jury returned a verdict in her favor for $30,000. Exum brought this action against Great American, receiving a judgment of $20,000. In affirming the judgment of the trial court, the Court of Appeals of Georgia wrote:

In view of this court’s decision in U. S. Fidel. &c. Co. v. Evans, 116 Ga. App. 93 (156 SE2d 809), it cannot be said that the “bad faith decisions,” such as those above, decided with regard to the penalty provisions of the Insurance Code supply the applicable test. The Evans case held that in deciding whether to accept an offer of settlement within policy coverage the insurer must accord the interest of its insured the same faithful consideration it gives its own interest and that it is for the jury to decide whether the insurer has or has not so acted. The Evans case involved an offer to settle within policy limits after there had been a trial and a verdict in excess of policy limits. The insurer chose appeal over settlement but lost.

In the case sub judice the opportunity to settle within policy limits arose before verdict and judgment. In Evans the opportunity to settle within policy limits came after verdict and judgment. This factual distinction does not render the Evans test inapplicable here. The question is not one of whether a right to trial by jury or appeal will be abrogated. The question is whether the insurer’s choice to pursue the right in view of the existing circumstances is one which gives equal consideration to the interest of the insured. Also see State Farm Mut. Auto. Ins. Co. v. Smoot, 381 F2d 331.


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Marcus A. Roberts & Associates | Atlanta Bad Faith Insurance Lawyer

Do you think that an insurer is acting in bad faith in its handling or your recent car accident claim? You will want to immediately contact Marcus A. Roberts & Associates for help obtaining the most favorable possible resolution to your case.

Marcus A. Roberts is an experienced personal injury attorney in Atlanta who represents individuals all over Gwinnett County, DeKalb County, Clayton County, Cobb County, and Fulton County. Call 404-577-4444 or fill out an online contact form to have our lawyer review your case and discuss all of your legal options during a free, no obligation consultation.


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