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Georgia Bad Faith Insurance Practices

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People purchase insurance to protect themselves in the event of an unexpected event, like a car accident, theft, or natural disaster. Unfortunately, not all insurance companies operate in good faith when dealing with policyholders. In fact, an alarming number of insurers engage in dishonest and unfair practices when investigating, approving or denying, and paying out claims, a practice known as bad faith insurance. Acting in bad faith isn’t only unethical, it is also illegal in Georgia, where insurers are required to abide by a certain standard when providing services to their policyholders. Insurers who fail to abide by these standards can be held liable by the wronged party.

What is Bad Faith Insurance? 

Bad faith insurance is a term used to describe any deliberate or negligent act by an insurance company that involves breach of contract, fraud, deception, or dishonesty towards a policyholder.

Common examples include:

  • Failing to investigate a claim promptly;
  • Denying a valid claim without reasonable justification;
  • Delaying payment of a claim; and
  • Undervaluing or underpaying a valid claim.

All of these actions can have far-reaching consequences for policyholders, who may find themselves unable to cover their accident-related losses, or forced to accept an unfairly low settlement offer out of necessity.

Georgia’s Legal Protections 

Georgia law specifically protects policyholders from these kinds of underhanded tactics, as it requires insurers to:

  • Adjust losses fairly and promptly;
  • Make reasonable efforts to investigate and evaluate claims;
  • Make a good faith effort to settle when liability is reasonably clear; and
  • Accept or deny settlement offers within 60 days of receipt.

Insurers who violate these rules can be held liable by the claimant and required not only to pay the value of the claim, but also 50 percent of the liability for the loss, or $5,000, as well as attorney’s fees.

Keep an Eye Out for These Red Flags 

There are certain things that policyholders should keep an eye out for that could be indicative of bad faith on the part of an insurer, including:

  • A lack of communication during the claims process;
  • A failure to investigate or evaluate a claimant’s position; and
  • A refusal to explain coverage or an adjuster’s final decision.

If you recognize any of these signs while engaged in the insurance claim filing process, you should consider reaching out to an attorney who is well-versed in the kinds of bad faith practices used by insurance companies in Georgia.

Speak with Our Atlanta Personal Injury Lawyers 

If you were injured in an accident and have encountered resistance from your insurer when it comes to investigating or approving your claim, they may be engaging in bad faith practices. Fortunately, insurance companies can be held liable for these kinds of tactics, so if you believe that your own insurer is undervaluing your claim, is refusing to communicate with you, or is otherwise making the claims process unduly difficult, please call the experienced Atlanta personal injury lawyers at Shiver Hamilton Campbell for advice. You can reach us at 404-593-0020 or via online message.

Sources: 

law.justia.com/codes/georgia/2022/title-33/chapter-4/section-33-4-6/

law.justia.com/codes/georgia/2022/title-33/chapter-4/section-33-4-7/

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