11) Can my auto insurer be penalized for not paying my U/UIM claim fully?
Insurance carriers have a duty to act in good faith and fair dealing to their insured.
Meaning, they have a duty to live up to their end of the bargain when it comes to insurance coverage. They cannot put their interests above their insured's interests.
The equal consideration rule states that an insurer must give equal consideration to its insured when making a decision to settle or provide insurance coverage, usually in the context of a time-limited demand letter.
In short, it prohibits insurers from ignoring their insured’s interests by making unilateral decisions in the insurance carrier’s sole interest.
Georgia has specific statutes that dictate when and how different types of insurance carriers can be held accountable.
For instance, first-party bad faith claims can be pursued against property damage and UM/UIM carriers when certain conditions are met. Alternatively, third-party claims for bad faith can be pursued when the insurance carrier is guilty of negligence, fraud, or bad faith in failing to compromise a claim.
Yes, an insurance carrier can be held accountable in a third-party claim for bad faith due to simple negligence.
The standard for responding to a time demand is negligence, as well as bad faith. So, an insurance carrier can be held accountable for negligently respond to a time-limited demand.
Common situations evidencing insurance misconduct often include:
Bad faith laws exist to keep insurers accountable for their obligation to their insured.
They are meant to force insurance companies to live up to their end of the bargain and properly provide insurance coverage for valid claims.
The damages available depend on the specific claim for bad faith.
But, the damages usually include amounts above and beyond the original policy limits on the insurance policy and are punitive in nature.
Damages can include statutory penalties, interest, liability judgments, attorney fees and expenses, and punitive damages. Damages may also include consequential damages, such as:
First party bad faith occurs when your own insurance carrier fails to provide full coverage to you, the insured.
This most often occurs after a motor vehicle collision, involving property damage claims or uninsured/underinsured motorist claims.
Third party bad faith occurs when an injured party that is not the insured, sends a demand for payment to an insurance carrier due to the misconduct or negligence of their insured.
Failure to pay on these valid claims could result in a third-party claim for bad faith.
Yes, Georgia has specific statutes to penalize insurance carriers who fail to provide proper compensation on a valid property damage claim.
This is a type of first-party bad faith claim.
Specifically, a property damage insurance carrier can be responsible for paying any attorney's fees, plus a penalty of 50% of the amount that should have been paid for the property damage claim.
However, Georgia's statute sets some pretty specific criteria before these penalties can be pursued. First, a demand must be sent to the insurance carrier and the demand must comply with the conditions set in the statute. Next, you are required to obtain a verdict (usually in small claims court) that affirms your valuation of the property damage. Finally, the insurance carrier has an opportunity to demonstrate that is actions were not done in bad faith - i.e. they had bonafide reasons to refuse your earlier demand.
