Georgia’s insurance bad faith statute is one of the most important — and least understood — tools available to accident victims. When an insurer unreasonably delays or denies a valid claim, O.C.G.A. § 33-4-6 provides a mechanism to hold it accountable with penalties beyond the underlying claim value.
What O.C.G.A. § 33-4-6 Provides
Under O.C.G.A. § 33-4-6, if an insurer refuses to pay a covered claim in bad faith, the insured may recover:
- The full amount of the covered loss
- A bad faith penalty of up to 50 percent of the covered loss
- Reasonable attorney fees
This statute was designed to deter insurers from using delay and denial as a settlement strategy against policyholders who cannot afford to wait out protracted litigation.
The 60-Day Demand Requirement
Before filing a bad faith action, Georgia law requires the claimant to make written demand for payment and give the insurer 60 days to respond. If the insurer fails to pay within 60 days without a reasonable justification, a bad faith claim ripens. The 60-day clock runs from the written demand — making the timing and content of the demand letter a critical strategic decision.
What “Bad Faith” Means in Georgia
Georgia courts have interpreted bad faith broadly. It does not require proof that the insurer acted with malicious intent — only that the refusal to pay was not justified under the circumstances. Common bad faith scenarios include:
- Refusal to pay clear-liability claims without reasonable investigation
- Lowball offers so inadequate they evidence bad faith rather than genuine negotiation
- Unreasonable delay in investigation or payment beyond the 60-day window
- Failure to tender policy limits on a claim that clearly exceeds them
First-Party vs. Third-Party Bad Faith
O.C.G.A. § 33-4-6 applies primarily to first-party claims — claims made by the insured against their own insurer (UM/UIM claims, MedPay, or homeowner’s coverage). Third-party bad faith (your claim against the at-fault driver’s insurer) is governed by a different Georgia doctrine rooted in the insurer’s duty to its own insured. An insurer that fails to settle within policy limits when given a reasonable opportunity to do so can expose its insured to an excess judgment — and face separate bad faith liability as a result.
Practical Application
Bad faith claims are most commonly asserted in UM/UIM disputes where your own insurer delays or denies a covered claim. If your insurer is stalling, offering an unreasonably low settlement, or denying a claim without adequate basis, O.C.G.A. § 33-4-6 gives you significant leverage. A Georgia accident attorney can evaluate whether your claim meets the statutory requirements. Call for a free evaluation today.