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GA Sup. Ct. Clarifies Duty of Insurance Companies to Settle Car Accident Cases

March 28, 2019

GEORGIA – In a recent ruling, the Georgia Supreme Court has clarified the duty of insurance companies to settle car accident cases, according to an article posted online at The case before the Court stemmed from a revoked settlement offer by an injured party.* 

The car accident at the core of the case occurred in August 2008. The driver who caused the accident was killed in the crash, and the other victims filed claims against his insurance with First Acceptance. First Acceptance’s lawyer asked all of the parties to attend a settlement conference to discuss their claims. 

In response, two of the injured parties, a mother and daughter, sent a letter to First Acceptance saying they were willing to attend a conference or, alternatively, were willing to settle their claims for the insurance policy limits. The pair later revoked the offer to settle and refused an offer from First Acceptance for the policy limits. They also did not attend the settlement conference. 

In a later trial, the mother and daughter were awarded $5.3 million in damages, and the insured driver’s estate filed a lawsuit against First Acceptance for the $5.3 million. The lawsuit alleged that First Acceptance violated its duties to the insured when it did not settle for the policy limits.

The lower court issued an order of summary judgement for First Acceptance, but the court of appeals reversed. The Georgia Supreme Court then took up the case. The Court issued its ruling in the case in which it clarified that an insurance company does not have a duty to settle until the injured party extends a valid offer.  

The offer to settle at the policy limits from the mother and daughter had no timeline attached, the Court said, so First Acceptance had no way of knowing it would be revoked prior to the settlement conference. 

According to the Court, an insurance company cannot be held liable for bad faith in Georgia for failure to tender policy limits unless there is a clear and unequivocal offer to settle and the insurance company rejects the offer.

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Category: Auto Accidents

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