Georgia Court Of Appeals: Insurance Company May Be Liable For Legal Fees Incurred By Policyholder Forced To File Personal Injury Lawsuit
Uninsured motorist (UM) coverage provides you with benefits in the event you are injured by a negligent driver who lacks sufficient insurance to fully compensate you for your losses. Of course, your insurance company may not always be eager to pay out your claim. For that reason, Georgia law states that if an insurer fails to pay a demand for UM benefits within 60 days and said failure was in “bad faith,” the insured party is entitled to additional damages.
Specifically, the law says that a plaintiff in an insurance bad faith claim can ask for 25 percent of “the recovery” or $25,000, whichever is greater. In addition, the plaintiff may ask for any “reasonable attorney’s fees” incurred in the “prosecution of the case.”
The Georgia Court of Appeals recently addressed the precise application of these terms. The case before the Court, Curry v. Allstate Property & Casualty Insurance Co., involved a January 2015 car accident. The plaintiff was the injured party. Another driver admitted fault for the accident. The negligent driver’s insurance company promptly paid the plaintiff $25,000, the limits of the negligent driver’s policy.
Since the plaintiff’s total damages from the accident exceeded $25,000, he filed a claim for UM benefits with his own insurance carrier, Allstate. The insurer did not reply within the 60-day time limit specified by state law. Consequently, the plaintiff filed a personal injury lawsuit against the negligent driver–this is a necessary step when pursuing UM benefits–and obtained a judgment of approximately $85,000.
The plaintiff then filed a separate bad-faith lawsuit against Allstate, seeking 25 percent of the $85,000 judgment and legal fees incurred in connection with both the bad-faith lawsuit and the original personal injury claim. The trial court, however, held that the plaintiff was limited by statute to recovering 25 percent of the $30,000 limit of his UM policy–not the personal injury judgment–and only those legal fees incurred in connection with the bad-faith lawsuit.
The Georgia Court of Appeals partially disagreed with the trial court. Both courts agreed that 25 percent of “the recovery” under Georgia’s bad faith law referred to the limits of the UM policy, not the personal injury judgment. But as to legal fees, the Court of Appeals said nothing in the statute prevented the plaintiff from seeking his costs in connection with the original personal injury lawsuit. He would, however, still need to prove at trial that the insurer acted in bad faith by refusing to pay his claim in the first place.
Speak with an Alpharetta Personal Injury Lawyer Today
Dealing with insurance companies, even your own, following an accident can be far more legally complicated than you realize. That is why it is best to work with a qualified Atlanta car accident attorney who will zealously represent your interests. Contact Shiver Hamilton Campbell today to schedule a free consultation.