What to Do When an Auto Insurance Company Refuses to Pay for Losses

Every driver in Georgia is required to carry liability insurance to cover damages incurred in automobile accidents. If you get into a car accident for which another driver is at fault, you have the right to file a claim against their insurer. If you are alleged to be at fault, you expect that your insurance company will defend you and pay out for any covered damages. However, there are cases when insurers acting in bad faith deny covered claims or pay less than the amounts covered, leaving their insureds out of pocket. What can you do in these situations?

Under Georgia law, an automobile insurer has an affirmative duty to adjust a personal injury or property damage loss fairly and promptly and to make a reasonable effort to investigate and evaluate the claim. Where liability is reasonably clear, the insurer must make a good faith effort to settle with the claimant potentially entitled to recover.

Unfortunately, insurers driven by efforts to improve their bottom line sometimes disregard or violate their legal duty. Examples of insurer bad faith are denying payment of a legitimate claim covered under a policy, improperly discounting the value of a claim or undervaluing the property involved, inexplicably delaying action on a claim, refusing to defend an insured against a claim or lawsuit and failing to negotiate a settlement in earnest.

If your own insurer or another party’s insurer refuses to pay fully and you suspect bad faith, you have a remedy. Under Georgia law, you can bring a lawsuit, and if a jury finds that the refusal was in bad faith, the insurer is liable for the covered loss and also a penalty equal to 50 percent of the insurer’s liability for the loss or $5,000.00, whichever is greater. In addition, the insurer is responsible for your reasonable attorney's fees for prosecuting the bad-faith suit.

You can bring a bad-faith suit against the insurer for the at-fault party and also against your own carrier regarding claims under your uninsured motorist coverage. The suit can be filed after 60 days have passed from the time you make a written demand for payment of the claim. The insurer cannot avoid suit by making payment on the claim after the 60-day period.

Another option is to file a complaint against the insurance company at the state Office of Insurance and Safety Fire Commissioner. It is possible that the agency might impel the insurer to take favorable action on the claim. However, if a bad-faith suit becomes necessary, it should not be attempted without the aid of skilled legal counsel.

The automobile accident attorneys at Jason & Bradley, LLC in Stone Mountain, Georgia have represented plaintiffs in the Atlanta area and throughout Georgia since 1989. We are well-versed in insurance adjuster tactics and know how to vindicate our clients’ rights when bad faith occurs. To schedule your free initial consultation, call 404-297-9933 or contact us online.